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Climate And Scale In Economic Growth

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  • Masters, William A.
  • McMillan, Margaret S.

Abstract

This paper introduces new data on climatic conditions to empirical tests of growth theories. We find that, since 1960, temperate countries have converged towards high levels of income while tropical nations have converged towards various income levels associated with economic scale and the extent of the market. These results hold for a wide range of tests. A plausible explanation is that temperate regions' growth was assisted by their climate, perhaps historically for their transition out of agriculture into sectors whose productivity converges across countries, while tropical countries' growth is relatively more dependent on gains from specialization and trade.

Suggested Citation

  • Masters, William A. & McMillan, Margaret S., 2001. "Climate And Scale In Economic Growth," Miscellaneous Papers 11845, Agecon Search.
  • Handle: RePEc:ags:miscpa:11845
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    File URL: http://purl.umn.edu/11845
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    References listed on IDEAS

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    More about this item

    Keywords

    International Development;

    JEL classification:

    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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