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The Long-Lived Effects of Historic Climate on the Wealth of Nations

  • Bluedorn, John C.
  • Valentinyi, Akos
  • Vlassopoulos, Michael

We investigate the long-run consequences of historic, climatic temperatures (1730-2000) for the modern cross-country income distribution. Using a newly constructed dataset of climatic temperatures stretching over three centuries (18th, 19th, and 20th), we estimate a robust and significant time-varying, non-monotonic effect of climatic temperature upon current incomes for a cross-section of 167 countries. We find a large, positive effect of 18th century climatic temperature and an even larger, negative effect of 19th century climatic temperature upon current incomes. When historic, climatic temperature is introduced, the effect of 20th century climatic temperature on current income is either weakly positive or insignificant. Our findings are robust to various sub-samples, additional geographic controls, and alternative income measures. The negative relationship between current, climatic temperature and current income that is commonly estimated appears to reflect the long-run effect of climatic variations in the 18th and 19th centuries.

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File URL: http://mpra.ub.uni-muenchen.de/18701/1/MPRA_paper_18701.pdf
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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 18701.

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Date of creation: 17 Nov 2009
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Handle: RePEc:pra:mprapa:18701
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  1. Olsson, Ola & Hibbs Jr., Douglas A., 2000. "Biogeography and Long-Run Economic Development," Working Papers in Economics 26, University of Gothenburg, Department of Economics, revised 11 Aug 2000.
  2. William A Masters and Margaret S McMillan, 2000. "Climate and Scale in Economic Growth," Economics Series Working Papers WPS/2000-13, University of Oxford, Department of Economics.
  3. Nathan Nunn & Diego Puga, 2009. "Ruggedness: The Blessing of Bad Geography in Africa," NBER Working Papers 14918, National Bureau of Economic Research, Inc.
  4. Michael Greenstone & Olivier Deschenes, 2006. "The Economic Impacts of Climate Change: Evidence from Agricultural Profits and Random Fluctuations in Weather," Working Papers 2006.6, Fondazione Eni Enrico Mattei.
  5. Melissa Dell & Benjamin F. Jones & Benjamin A. Olken, 2009. "Temperature and Income: Reconciling New Cross-Sectional and Panel Estimates," NBER Working Papers 14680, National Bureau of Economic Research, Inc.
  6. Rodrik, Dani & Subramanian, Arvind & Trebbi, Francesco, 2002. "Institutions Rule: The Primacy of Institutions Over Geography and Integration in Economic Development," CEPR Discussion Papers 3643, C.E.P.R. Discussion Papers.
  7. John Horowitz, 2009. "The Income–Temperature Relationship in a Cross-Section of Countries and its Implications for Predicting the Effects of Global Warming," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 44(4), pages 475-493, December.
  8. Nathan Nunn, 2009. "The Importance of History for Economic Development," NBER Working Papers 14899, National Bureau of Economic Research, Inc.
  9. Robert J. Barro & Jong-Wha Lee, 2000. "International Data on Educational Attainment: Updates and Implications," CID Working Papers 42, Center for International Development at Harvard University.
  10. Olivier Deschenes & Enrico Moretti, 2007. "Extreme Weather Events, Mortality and Migration," NBER Working Papers 13227, National Bureau of Economic Research, Inc.
  11. Daron Acemoglu & Simon Johnson & James A. Robinson, 2001. "Reversal of Fortune: Geography and Institutions in the Making of the Modern World Income Distribution," NBER Working Papers 8460, National Bureau of Economic Research, Inc.
  12. Oded Galor, 2009. "2008 Lawrence R. Klein Lecture –Comparative Economic Development: Insights from Unified Growth Theory," Working Papers 2009-10, Brown University, Department of Economics.
  13. Daron Acemoglu & Simon Johnson & James A. Robinson, 2001. "The Colonial Origins of Comparative Development: An Empirical Investigation," American Economic Review, American Economic Association, vol. 91(5), pages 1369-1401, December.
  14. Angus Maddison, 2005. "Measuring And Interpreting World Economic Performance 1500-2001," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 51(1), pages 1-35, 03.
  15. Jeffrey D. Sachs, 2001. "Tropical Underdevelopment," NBER Working Papers 8119, National Bureau of Economic Research, Inc.
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