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The Impact of Climate Conditions on Economic Production. Evidence from a Global Panel of Regions

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  • Kalkuhl, Matthias
  • Wenz, Leonie

Abstract

We estimate the impacts of climate on economic growth using Gross Regional Product (GRP) for more than 1,500 regions in 77 countries. In temperate and tropical climates, annual temperature shocks reduce GRP whereas they increase GRP in cold climates. With respect to long-term climate conditions, one degree of temperature increase reduces output by 2-3%. The effect of annual or long-term precipitation is found to be less important and less robust among specifications. For projected global warming of 4°C until 2100, we find that regions lose 9\% of economic output on average and more than 20% of output in tropical regions.

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  • Kalkuhl, Matthias & Wenz, Leonie, 2018. "The Impact of Climate Conditions on Economic Production. Evidence from a Global Panel of Regions," EconStor Preprints 178288, ZBW - Leibniz Information Centre for Economics.
  • Handle: RePEc:zbw:esprep:178288
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    Keywords

    climate change; climate damages; climate impacts; growth regression;
    All these keywords.

    JEL classification:

    • E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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