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Investigation Of The Sunspots And Gdp Nexus: The Case Of Balkan Countries

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  • Berislav Žmuk
  • Hrvoje Jošić

Abstract

The phenomenon known as sunspots refers to regions of the Sun’s photosphere that are darker than their surroundings because their surface temperature is lower. The sunspot growth theory, however debatable, is one of the first explanations for economic development that explains how variations in the Sun’s activity affect the business cycle. Jevons developed the sunspot hypothesis in 1875. To reevaluate this notion, this research uses correlation and regression analysis to explore the relationship between sunspots and GDP in the context of 11 Balkan nations over the years 1960–2021. By extending the sample of nations in panel regression models to include all nations on Earth, further robustness testing is accomplished. It was found that there exist significantly negative medium strength correlations between sunspots and gross domestic product values of 8 out of 11 Balkan countries. Similar findings were obtained using simple linear regression analysis. The results of the cross-country panel regression models further highlight the negative impact of solar activity on economic activity, which is also associated with nations that are located at higher latitudes.

Suggested Citation

  • Berislav Žmuk & Hrvoje Jošić, 2023. "Investigation Of The Sunspots And Gdp Nexus: The Case Of Balkan Countries," Economic Annals, Faculty of Economics and Business, University of Belgrade, vol. 68(237), pages 69-95, April – J.
    • Handle: RePEc:beo:journl:v:68:y:2023:i:237:p:69-95
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    References listed on IDEAS

    as
    1. Burakov, D., 2017. "Do Sunspots Matter for Cycles in Agricultural Lending: a VEC Approach to Russian Wheat Market," AGRIS on-line Papers in Economics and Informatics, Czech University of Life Sciences Prague, Faculty of Economics and Management, vol. 9(1), March.
    2. Carlos Garcia-Mata & Felix I. Shaffner, 1934. "Solar and Economic Relationships: A Preliminary Report," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 49(1), pages 1-51.
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    More about this item

    Keywords

    sunspots; GDP per capita; Balkan countries; correlation and regression; H-P filter; panel data.;
    All these keywords.

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • F44 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Business Cycles
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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