Climate Change and Economic Growth: Evidence from the Last Half Century

Melissa Dell, Benjamin F. Jones, Benjamin A. Olken

NBER Working Paper No. 14132
Issued in June 2008
NBER Program(s):Environment and Energy Economics, Economic Fluctuations and Growth

This paper uses annual variation in temperature and precipitation over the past 50 years to examine the impact of climatic changes on economic activity throughout the world. We find three primary results. First, higher temperatures substantially reduce economic growth in poor countries but have little effect in rich countries. Second, higher temperatures appear to reduce growth rates in poor countries, rather than just the level of output. Third, higher temperatures have wide-ranging effects in poor nations, reducing agricultural output, industrial output, and aggregate investment, and increasing political instability. Analysis of decade or longer climate shifts also shows substantial negative effects on growth in poor countries. Should future impacts of climate change mirror these historical effects, the negative impact on poor countries may be substantial.

A non-technical summary of this paper is available in the December 2008 NBER Digest.  You can sign up to receive the NBER Digest by email.

Acknowledgments

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w14132

Published: Dell M, Jones B, Olken B. Temperature Shocks and Economic Growth: Evidence from the Last Half Century. American Economic Journal: Macroeconomics. 2012;4(3):66-95.

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