Droughts, Floods and Financial Distress in the United States
AbstractThe relationships among the weather, agricultural markets, and financial markets have long been of interest to economic historians, but relatively little empirical work has been done. We push this literature forward by using modern drought indexes, which are available in detail over a wide area and for long periods of time to perform a battery of tests on the relationship between these indexes and sensitive indicators of financial stress. The drought indexes were devised by climate historians from instrument records and tree rings, and because they are unfamiliar to most economic historians and economists, we briefly describe the methodology. The financial literature in the area can be traced to William Stanley Jevons, who connected his sun spot theory to rainfall patterns. The Dust bowl of the 1930s brought the climate-finance link to the attention of the general public. Here we assemble new evidence to test various hypotheses involving the impact of extreme swings in moisture on financial stress.
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Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 15596.
Date of creation: Dec 2009
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Publication status: published as Droughts, Floods and Financial Distress in the United States , John Landon-Lane, Hugh Rockoff, Richard H. Steckel. in The Economics of Climate Change: Adaptations Past and Present , Libecap and Steckel. 2011
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- John Landon-Lane & Hugh Rockoff & Richard H. Steckel, 2011. "Droughts, Floods and Financial Distress in the United States," NBER Chapters, in: The Economics of Climate Change: Adaptations Past and Present, pages 73-98 National Bureau of Economic Research, Inc.
- E3 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles
- N0 - Economic History - - General
- N11 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - U.S.; Canada: Pre-1913
- N12 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - U.S.; Canada: 1913-
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-12-19 (All new papers)
- NEP-HIS-2009-12-19 (Business, Economic & Financial History)
- NEP-MAC-2009-12-19 (Macroeconomics)
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