Cities, climate & growth: Evidence from Athens, Greece

Urban economies are increasingly shaped by climate variability, making it essential to understand how environmental factors interact with economic drivers to influence output growth. This study examines the determinants of urban economic performance in Athens, Greece, focusing on labor growth, gross fixed capital formation, and climate variables such as temperature and precipitation. Using an extensive dataset spanning the period 2000–2022, we employ robust econometric techniques to quantify the impact of these factors on regional output growth. Our findings highlight the critical role of climate conditions (temperature and precipitation) in shaping economic trajectories, stressing the necessity for climate-conscious urban policies. The results emphasize the importance of integrating climate resilience strategies into economic planning, as cities face mounting environmental uncertainties. By bridging economic modeling with climate science, this study provides actionable insights for policymakers, urban planners, and economists, contributing to the broader discourse on sustainable urban development in the face of climate change. • We bridge economic modelling with climate science • We quantify the impact of climate on economic growth • We focus on temperature and precipitation • We focus on the city of Athens, Greece • We provide insights for policymakers