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The Long-Lived Effects of Historic Climate on the Wealth of Nations

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  • Bluedorn, John C.
  • Valentinyi, Akos
  • Vlassopoulos, Michael

Abstract

We investigate the long-run consequences of historic, climatic temperatures (1730-2000) for the modern cross-country income distribution. Using a newly constructed dataset of climatic temperatures stretching over three centuries (18th, 19th, and 20th), we estimate a robust and significant time-varying, non-monotonic effect of climatic temperature upon current incomes for a cross-section of 167 countries. We find a large, positive effect of 18th century climatic temperature and an even larger, negative effect of 19th century climatic temperature upon current incomes. When historic, climatic temperature is introduced, the effect of 20th century climatic temperature on current income is either weakly positive or insignificant. Our findings are robust to various sub-samples, additional geographic controls, and alternative income measures. The negative relationship between current, climatic temperature and current income that is commonly estimated appears to reflect the long-run effect of climatic variations in the 18th and 19th centuries.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 18701.

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Date of creation: 17 Nov 2009
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Handle: RePEc:pra:mprapa:18701

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Keywords: climate; temperature; economic performance; geography; history;

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  1. Olsson, Ola & Hibbs Jr., Douglas A., 2000. "Biogeography and Long-Run Economic Development," Working Papers in Economics 26, University of Gothenburg, Department of Economics, revised 11 Aug 2000.
  2. Olivier Deschenes & Michael Greenstone, 2006. "The Economic Impacts of Climate Change Evidence from Agricultural Profits and Random Fluctuations in Weather," Working Papers 0601, Massachusetts Institute of Technology, Center for Energy and Environmental Policy Research.
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Cited by:
  1. Fenske, James & Kala, Namrata, 2013. "Climate, ecosystem resilience and the slave trade," MPRA Paper 50816, University Library of Munich, Germany.

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