Working Paper: NBER ID: w15711
Authors: Benjamin F. Jones; Benjamin A. Olken
Abstract: This paper uses international trade data to examine the effects of climate shocks on economic activity. We examine panel models relating the annual growth rate of a country's exports in a particular product category to the country's weather in that year. We find that a poor country being 1 degree Celsius warmer in a given year reduces the growth rate of that country's exports by between 2.0 and 5.7 percentage points, with no detectable effects in rich countries. We find negative effects of temperature on exports of both agricultural products and light manufacturing products, with little apparent effects on heavy industry or raw materials. The results confirm large negative effects of temperature on poor countries' economies and suggest that temperature affects a much wider range of economic activity than conventionally thought.
Keywords: No keywords provided
JEL Codes: F18; Q54
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Temperature increase (Q54) | Decreased productivity in light manufacturing (L69) |
| Temperature increase (Q54) | Adverse climatic conditions affecting agricultural outputs (Q54) |
| Temperature increase (Q54) | No significant effect on export growth in rich countries (F69) |
| Temperature increase (Q54) | Negative effects concentrated in agricultural and light manufacturing sectors (F69) |
| Temperature increase (Q54) | Little to no effect on heavy industry and raw materials (L79) |
| Temperature increase (Q54) | Reduced export growth in poor countries (F63) |