Temperature Shocks and Economic Growth: Evidence from the Last Half Century

This paper uses historical fluctuations in temperature within countries to identify its effects on aggregate economic outcomes. We find three primary results. First, higher temperatures substantially reduce economic growth in poor countries. Second, higher temperatures may reduce growth rates, not j...

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Bibliographic Details
Published in:American economic journal. Macroeconomics 2012-07, Vol.4 (3), p.66-95
Main Authors: Dell, Melissa, Jones, Benjamin F., Olken, Benjamin A.
Format: Article
Language:English
Subjects:
Aggregates
Agriculture
Climate change
Climate models
Countries
Debates
Economic activity
Economic development
Economic growth
Economic growth models
Economic growth rate
Economic history
Economic models
Economic statistics
Economic theory
Estimates
Industrial production
Macroeconomics
Precipitation
Productivity
Rain
Social unrest
Studies
Temperature
Temperature effects
Weather
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Summary:This paper uses historical fluctuations in temperature within countries to identify its effects on aggregate economic outcomes. We find three primary results. First, higher temperatures substantially reduce economic growth in poor countries. Second, higher temperatures may reduce growth rates, not just the level of output. Third, higher temperatures have wide-ranging effects, reducing agricultural output, industrial output, and political stability. These findings inform debates over climate's role in economic development and suggest the possibility of substantial negative impacts of higher temperatures on poor countries.
ISSN:1945-7707
1945-7715
DOI:10.1257/mac.4.3.66