• agent-based modelling
• Climate change
• global value chains

This thesis examines the substantial negative effects of climate change on global economic activity, focusing on the propagation of these impacts through supply chain relationships. Building upon Mandel's (2020) agent-based model, this study innovatively simulates climate damages at the firm level, aggregating them using a bottom-up approach. A key feature introduced in this model is a nested CES production function, which allows distinguishing the dynamics of substitution away from a sector of inputs and substitution away from a supplier. The extended model aims to analyse the effects of weather extremes on economic aggregates and short-term supply chain reorganization, providing an understanding of how climate-induced disruptions in individual firms can escalate to broader economic consequences.