The economic impact of weather and climate
Abstract
I propose a new conceptual framework to disentangle the impacts of weather and climate on economic activity and growth: A stochastic frontier model with climate in the production frontier and weather shocks as a source of inefficiency. I test it on a sample of 160 countries over the period 1950-2014. Temperature and rainfall determine production possibilities in both rich and poor countries; positively in cold countries and negatively in hot ones. Weather anomalies reduce inefficiency in rich countries but increase inefficiency in poor and hot countries; and more so in countries with low weather variability. The climate effect is larger that the weather effect.
- Publication:
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arXiv e-prints
- Pub Date:
- February 2021
- DOI:
- 10.48550/arXiv.2102.13110
- arXiv:
- arXiv:2102.13110
- Bibcode:
- 2021arXiv210213110T
- Keywords:
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- Economics - General Economics