IDEAS home Printed from https://ideas.repec.org/a/aea/aejmac/v4y2012i3p66-95.html
   My bibliography  Save this article

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

Author

Listed:
  • Melissa Dell
  • Benjamin F. Jones
  • Benjamin A. Olken

Abstract

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. (JEL E23, O13, Q54, Q56)

Suggested Citation

  • Melissa Dell & Benjamin F. Jones & Benjamin A. Olken, 2012. "Temperature Shocks and Economic Growth: Evidence from the Last Half Century," American Economic Journal: Macroeconomics, American Economic Association, vol. 4(3), pages 66-95, July.
  • Handle: RePEc:aea:aejmac:v:4:y:2012:i:3:p:66-95
    Note: DOI: 10.1257/mac.4.3.66
    as

    Download full text from publisher

    File URL: http://www.aeaweb.org/articles.php?doi=10.1257/mac.4.3.66
    Download Restriction: no

    File URL: http://www.aeaweb.org/aej/mac/data/2010-0092_data.zip
    Download Restriction: no

    File URL: http://www.aeaweb.org/aej/mac/app/2010-0092_app.pdf
    Download Restriction: Access to full text is restricted to AEA members and institutional subscribers.
    ---><---

    References listed on IDEAS

    as
    1. Johnson, Simon & Larson, William & Papageorgiou, Chris & Subramanian, Arvind, 2013. "Is newer better? Penn World Table Revisions and their impact on growth estimates," Journal of Monetary Economics, Elsevier, vol. 60(2), pages 255-274.
    2. Dani Rodrik & Arvind Subramanian & Francesco Trebbi, 2004. "Institutions Rule: The Primacy of Institutions Over Geography and Integration in Economic Development," Journal of Economic Growth, Springer, vol. 9(2), pages 131-165, June.
    3. Steve Bond & Asli Leblebicioglu & Fabio Schiantarelli, 2010. "Capital accumulation and growth: a new look at the empirical evidence," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 25(7), pages 1073-1099, November/.
    4. Stern,Nicholas, 2007. "The Economics of Climate Change," Cambridge Books, Cambridge University Press, number 9780521700801, July.
    5. Angus Deaton & Alan Heston, 2010. "Understanding PPPs and PPP-Based National Accounts," American Economic Journal: Macroeconomics, American Economic Association, vol. 2(4), pages 1-35, October.
    6. Brian Jacob & Lars Lefgren & Enrico Moretti, 2007. "The Dynamics of Criminal Behavior: Evidence from Weather Shocks," Journal of Human Resources, University of Wisconsin Press, vol. 42(3).
    7. Olivier Deschênes & Michael Greenstone, 2007. "The Economic Impacts of Climate Change: Evidence from Agricultural Output and Random Fluctuations in Weather," American Economic Review, American Economic Association, vol. 97(1), pages 354-385, March.
    8. Joshua Graff Zivin & Matthew Neidell, 2014. "Temperature and the Allocation of Time: Implications for Climate Change," Journal of Labor Economics, University of Chicago Press, vol. 32(1), pages 1-26.
    9. Edward Miguel & Shanker Satyanath & Ernest Sergenti, 2004. "Economic Shocks and Civil Conflict: An Instrumental Variables Approach," Journal of Political Economy, University of Chicago Press, vol. 112(4), pages 725-753, August.
    10. Salvador Barrios & Luisito Bertinelli & Eric Strobl, 2010. "Trends in Rainfall and Economic Growth in Africa: A Neglected Cause of the African Growth Tragedy," The Review of Economics and Statistics, MIT Press, vol. 92(2), pages 350-366, May.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Melissa Dell & Benjamin F. Jones & Benjamin A. Olken, 2014. "What Do We Learn from the Weather? The New Climate-Economy Literature," Journal of Economic Literature, American Economic Association, vol. 52(3), pages 740-798, September.
    2. David Castells-Quintana & Maria del Pilar Lopez-Uribe & Tom McDermott, 2015. "Climate change and the geographical and institutional drivers of economic development," GRI Working Papers 198, Grantham Research Institute on Climate Change and the Environment.
    3. Lopez-Uribe, Maria del Pilar & Castells-Quintana, David & McDermott, Thomas K. J., 2017. "Geography, institutions and development: a review ofthe long-run impacts of climate change," LSE Research Online Documents on Economics 65147, London School of Economics and Political Science, LSE Library.
    4. Melissa Dell & Benjamin F. Jones & Benjamin A. Olken, 2008. "Climate Change and Economic Growth: Evidence from the Last Half Century," NBER Working Papers 14132, National Bureau of Economic Research, Inc.
    5. Naser Amanzadeh & Toshi H. Arimura & Mohammad Vesal & Seyed Farshad Fatemi Ardestani, 2021. "The Distributional Effects of Climate Change:Evidence from Iran," RIEEM Discussion Paper Series 2007, Research Institute for Environmental Economics and Management, Waseda University.
    6. Hjort, Ingrid, 2016. "Potential Climate Risks in Financial Markets: A Literature Overview," Memorandum 01/2016, Oslo University, Department of Economics.
    7. David García-León, 2015. "Weather and Income: Lessons from the Main European Regions," Working Papers 2015.39, Fondazione Eni Enrico Mattei.
    8. Marchiori, Luca & Maystadt, Jean-François & Schumacher, Ingmar, 2012. "The impact of weather anomalies on migration in sub-Saharan Africa," Journal of Environmental Economics and Management, Elsevier, vol. 63(3), pages 355-374.
    9. de Souza, Joao Paulo A., 2014. "Growth Complementarity Between Agriculture and Industry: Evidence from a Panel of Developing Countries," UMASS Amherst Economics Working Papers 2014-11, University of Massachusetts Amherst, Department of Economics.
    10. Ishak, Phoebe W., 2021. "Murder nature weather and violent crime in Brazil," Discussion Papers 2021/2, Free University Berlin, School of Business & Economics.
    11. Nicholas Apergis & Alexandros Gabrielsen & Lee Smales, 2016. "(Unusual) weather and stock returns—I am not in the mood for mood: further evidence from international markets," Financial Markets and Portfolio Management, Springer;Swiss Society for Financial Market Research, vol. 30(1), pages 63-94, February.
    12. Pamela Ragazzi, 2012. "Climate Change and Migration: A Gravity Model Approach," Working Papers 2012031, University of Ferrara, Department of Economics.
    13. J. Vernon Henderson & Adam Storeygard & David N. Weil, 2012. "Measuring Economic Growth from Outer Space," American Economic Review, American Economic Association, vol. 102(2), pages 994-1028, April.
    14. Richard S.J. Tol, 2020. "The Economic Impact of Weather and Climate," Video Library 2094, Department of Economics, University of Sussex Business School.
    15. Brückner, Markus, 2012. "An instrumental variables approach to estimating tax revenue elasticities: Evidence from Sub-Saharan Africa," Journal of Development Economics, Elsevier, vol. 98(2), pages 220-227.
    16. Ceren Baysan & Marshall Burke & Felipe González & Solomon Hsiang & Edward Miguel, 2018. "Economic and Non-Economic Factors in Violence: Evidence from Organized Crime, Suicides and Climate in Mexico," NBER Working Papers 24897, National Bureau of Economic Research, Inc.
    17. Jean-François Maystadt & Margherita Calderone & Liangzhi You, 2015. "Local warming and violent conflict in North and South Sudan," Journal of Economic Geography, Oxford University Press, vol. 15(3), pages 649-671.
    18. Anderson, Kym & Bruckner, Markus, 2012. "Distortions to Agriculture and Economic Growth in Sub-Saharan Africa," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124908, Agricultural and Applied Economics Association.
    19. N. R. Ramírez-Rondán & Marco E. Terrones & Andrea Vilchez, 2020. "Does financial sector development affect the growth gains from trade openness?," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 156(3), pages 475-515, August.
    20. Richard S J Tol, 2018. "The Economic Impacts of Climate Change," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 12(1), pages 4-25.

    More about this item

    JEL classification:

    • E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

    Lists

    This item is featured on the following reading lists, Wikipedia, or ReplicationWiki pages:
    1. Temperature Shocks and Economic Growth: Evidence from the Last Half Century (AEJ:MA 2012) in ReplicationWiki

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:aea:aejmac:v:4:y:2012:i:3:p:66-95. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: https://edirc.repec.org/data/aeaaaea.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Michael P. Albert (email available below). General contact details of provider: https://edirc.repec.org/data/aeaaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.