Extreme temperatures can create financial instability in middle- and low-income households, researchers with the Bank of Canada argue. 

Looking at payday loan information, authors Shihan Xie, Victoria Wenxin Xie, and Xu Zhang observed an increase in delinquency, default, and loan supply contraction associated with extreme temperatures. 

“The negative impact on vulnerable households can be amplified through potentially disastrous debt cycles, featuring increasing delinquency and default rates,”