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Climate Shocks and Economic Growth in Bangladesh

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  • Ahmed, S. Amer
  • Aguiar, Angel

Abstract

The Government of Bangladesh has made it a policy goal for the country to reach Middle-Income Country status by 2021, and projections that do not account for climate change effects, estimates that the Bangladesh’s economy will expand by 90 percent over the decade. However, this growth can be severely eroded by climate shocks, especially major floods, which are expected to occur more frequently in the future. Skilled labor demand growth is found to be more robust to climate shocks than unskilled labor, with climate change decreasing low-skilled labor demand growth more than skilled labor demand growth. The agriculture sector could grow by about 44 percent over the decade absent climate change effects, but climate shocks could reduce this growth within the range of 3 to 10 percentage points. The services sector is resilient, with climate shocks reducing its decadal growth by only 1 to 3 percentage points. Climate change and climate shocks to the rest of the global economy are thus only weakly transmitted to Bangladesh. They have little to no impact on Bangladesh’s GDP, although they can have a negative impact on export growth, and a positive impact on import growth.

Suggested Citation

  • Ahmed, S. Amer & Aguiar, Angel, 2012. "Climate Shocks and Economic Growth in Bangladesh," Conference papers 332272, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    • Handle: RePEc:ags:pugtwp:332272
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    File URL: https://ageconsearch.umn.edu/record/332272/files/5780.pdf
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    References listed on IDEAS

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