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Climate growth at risk in the global south

Author

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  • Giraldo, Carlos
  • Giraldo, Iader
  • Gomez-Gonzalez, Jose E.
  • Uribe, Jorge M.

Abstract

We examine the effect of climate uncertainty shocks on the growth rate distribution of Latin American and Caribbean countries from 1970 to 2022. We provide novel indicators for second-moment shocks (volatility), third-moment shocks (skewness), and fourth-moment shocks (kurtosis) based on daily temperatures at the country level. Our panel quantile models with fixed effects reveal a significant negative impact of time-varying skewness on the lower quantiles of the growth distribution during negative growth periods. Conversely, volatility and kurtosis do not significantly affect growth rates. These findings emphasize the importance of incorporating time-varying climate skewness in climate economic models and highlight the impacts of climate uncertainty shocks across different growth quantiles beyond the traditional effects of the average change in temperature. In short, the skewness of climate uncertainty shocks exacerbates episodes of vulnerable growth.

Suggested Citation

  • Giraldo, Carlos & Giraldo, Iader & Gomez-Gonzalez, Jose E. & Uribe, Jorge M., 2025. "Climate growth at risk in the global south," Energy Economics, Elsevier, vol. 149(C).
    • Handle: RePEc:eee:eneeco:v:149:y:2025:i:c:s0140988325006176
    DOI: 10.1016/j.eneco.2025.108790
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    JEL classification:

    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles

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