IDEAS home Printed from https://ideas.repec.org/a/eee/jmacro/v85y2025ics0164070425000175.html
   My bibliography  Save this article

What goes around comes around: The US climate-economic cycle

Author

Listed:
  • Boss, Konstantin
  • Testa, Alessandra

Abstract

We use a spatial data set of US temperatures in a factor-augmented VAR to quantify the contribution of the US economy to fluctuations in temperatures over the past 70 years. Disentangling natural from anthropogenic effects, we find that economic expansions have not only led to warming: technology shocks initially decreased temperatures, whereas investment and labor supply shocks increased them rapidly and persistently. Taken together, these economic shocks explained around 25% of long-term temperature variation in the US. In turn, temperature shocks have induced small contractions in aggregate GDP, but could even be beneficial for the economy, when they predominantly hit the western states.

Suggested Citation

  • Boss, Konstantin & Testa, Alessandra, 2025. "What goes around comes around: The US climate-economic cycle," Journal of Macroeconomics, Elsevier, vol. 85(C).
    • Handle: RePEc:eee:jmacro:v:85:y:2025:i:c:s0164070425000175
    DOI: 10.1016/j.jmacro.2025.103680
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0164070425000175
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jmacro.2025.103680?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • C38 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Classification Methdos; Cluster Analysis; Principal Components; Factor Analysis
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

    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:eee:jmacro:v:85:y:2025:i:c:s0164070425000175. See general information about how to correct material in RePEc.

    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.

    We have no bibliographic references for this item. You can help adding them by using 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: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/622617 .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.