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Incidence of Climate on Emerging Economies: Lessons from English's Past

Author

Listed:
  • Stéphane Auray

    () (Université Lille 3 (GREMARS), Université de Sherbrooke (GREDI) and CIRPÉE)

  • Aurélien Eyquem

    () (GATE, UMR 5824, Université de Lyon and Ecole Normale Supérieure Lettres et Sciences Humaines, France)

  • Frédéric Jouneau-Sion

    () (Universites Lille Nord de France)

Abstract

Evidence from English real wages and real land rents for the period 1500-1800 are used to evaluate the impact of temperature and precipitations on under-developed economies. Estimating key parameters of an AK-growth model, we extract Total Factor Productivity (TFP hereafter) shocks and estimate the impact of temperature and extreme precipitation events (droughts and and flood) on TFP. We produce evidence that a two degree reduction of temperature lowers TFP by 0.1 (one standard deviation of TFP shocks). We also show that, conditionally on temperatures, the impact of floods on TFP is statistically significant while the impact of droughts is not. We consider these results as a useful benchmark to measure the impact of global warming and/or measures intended to contain it on developing economies.

Suggested Citation

  • Stéphane Auray & Aurélien Eyquem & Frédéric Jouneau-Sion, 2010. "Incidence of Climate on Emerging Economies: Lessons from English's Past," Cahiers de recherche 10-02, Departement d'Economique de l'École de gestion à l'Université de Sherbrooke, revised 10 Mar 2010.
  • Handle: RePEc:shr:wpaper:10-02
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    File URL: http://gredi.recherche.usherbrooke.ca/wpapers/GREDI-1002.pdf
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    More about this item

    Keywords

    Economic growth; Climate; Real wages; Land rents;

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • N13 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Europe: Pre-1913
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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