2026/07/28 by Abdikadir Ahmed Mohamed, Nasteha Ahmed Afrah, Deqa Abdullahi Moalim
Agricultural and Biological Sciences · Social Sciences · #Climate change impacts on agriculture #Hydropower, Displacement, Environmental Impact #Transboundary Water Resource Management
paper · doi:10.1016/j.iref.2026.105668
openalex publication_date 2026/07/28 · openalex created_date 2026/07/29 · openalex updated_date 2026/07/31
Climate change and conflict represent two of the most formidable and interconnected challenges shaping aggregate financial conditions in the 21st century. Their combined influence is particularly acute in fragile economies, where recurrent environmental shocks and persistent insecurity undermine economic stability and national saving capacity. Despite their growing relevance, the joint effects of climate change and conflict on aggregate saving remain insufficiently explored, especially in contexts marked by prolonged fragility. This study investigates how temperature anomalies, CO 2 emissions, conflict intensity, rainfall, and GDP per capita are associated with aggregate saving in Somalia over the period 1987–2023. Employing a robust methodological framework that integrates OLS, FMOLS, GMM, CCR, and DOLS estimators, along with threshold regression, the analysis examines both linear and nonlinear relationships. A key finding is the identification of a temperature threshold of 0.1187 °C, beyond which savings decline more sharply, underscoring the nonlinear nature of climate impacts. The results suggest that environmental stressors and conflict pressures significantly weaken aggregate financial resilience, shifting the function of savings from wealth accumulation toward short-term coping and survival. The study contributes theoretically by extending the precautionary saving theory and life-cycle hypothesis to a fragile, climate-vulnerable setting. Empirically, it provides new evidence to inform climate adaptation strategies, financial inclusion policies, and conflict mitigation frameworks in Somalia and comparable fragile economies.