Temperature variability and the macroeconomy: a world tour

  • This paper uses historical monthly temperature level data for a panel of 114 countries to identify the effects of within year temperature level variability on productivity growth in five different macro regions, i.e., (1) Africa, (2) Asia, (3) Europe, (4) North America and (5) South America. We find two primary results. First, higher intra-annual temperature variability reduces (increases) productivity in Europe and North America (Asia). Second, higher intra-annual temperature variability has no significant effects on productivity in Africa and South America. Additional empirical tests indicate also the following: (1) rising intra-annual temperature variability reduces productivity (even thought less significantly)in both tropical and non-tropical regions, (2) inter-annual temperature variability reduces (increases) productivity in North America (Europe) and (3) winter and summer inter-annual temperature variability generates a drop in productivity in both Europe and North America. Taken together, these findings indicate that temperature variability shocks tend to have stronger adverse economic effects among richer economies. In a production economy featuring long-run productivity and temperature volatility shocks, we quantify these negative impacts and find welfare losses of 2.9% (1%) in Europe (North America).
Author:Michael DonadelliORCiDGND, Marcus JüppnerGND, Sergio VergalliORCiD
Parent Title (English):Environmental and resource economics
Publisher:Proquest ; Springer Science + Business Media B.V.
Place of publication:[S.l.] ; Dordrecht [u.a.]
Document Type:Article
Date of Publication (online):2021/07/28
Date of first Publication:2021/07/28
Publishing Institution:Universitätsbibliothek Johann Christian Senckenberg
Release Date:2022/07/11
Tag:Productivity growth; Temperature variability; Welfare; “Macro-regions”
Issue:online version before inclusion in an issue
Page Number:39
Early View: Online Version before inclusion in an issue
Open access funding provided by Università degli Studi di Brescia within the CRUI-CARE Agreement.
Wissenschaftliche Zentren und koordinierte Programme / Sustainable Architecture for Finance in Europe (SAFE)
Dewey Decimal Classification:3 Sozialwissenschaften / 33 Wirtschaft / 330 Wirtschaft
Licence (German):License LogoCreative Commons - Namensnennung 4.0