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Hydro-climatic thresholds and economic growth reversals in developing countries: an empirical investigation

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  • Cécile Couharde
  • Rémi Generoso

Abstract

In this paper, we exploit the Global Standardized Precipitation and Evapotranspiration Index database to search for a nonlinear relationship between hydro-climatic conditions and economic growth on a sample of developing countries over the period 1980-2011. We evidence a nonlinear link between hydro-climatic conditions and economic growth only in developing agricultural-dependant countries, the impact of hydro-climatic variations being more easily absorbed in more diversified economies. Furthermore, threshold values reached by hydro-climatic conditions that drive changes in the pattern of economic growth are lower than to those corresponding to extreme weather conditions, suggesting a high sensitivity of economic growth in developing agricultural-dependent countries to small fluctuations in weather.

Suggested Citation

  • Cécile Couharde & Rémi Generoso, 2015. "Hydro-climatic thresholds and economic growth reversals in developing countries: an empirical investigation," EconomiX Working Papers 2015-26, University of Paris Nanterre, EconomiX.
    • Handle: RePEc:drm:wpaper:2015-26
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    Cited by:

    1. Michael Berlemann & Daniela Wenzel, 2018. "Precipitation and Economic Growth," CESifo Working Paper Series 7258, CESifo.

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    More about this item

    Keywords

    Developing countries; Economic growth; Hydro-climatic conditions; Panel Smooth Transtion Regression (PSTR) model.;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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