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The effects on growth of El Nino and La Nina:local weather conditions matter

Author

Listed:
  • Remi Generoso
  • Cécile Couharde
  • Olivier Damette

Abstract

This paper contributes to the climate-economy literature by analysing the role of weather patterns in in uencing the transmission of global climate cycles to economic growth. More speci cally, we focus on El Ni~no Southern Oscillation (ENSO) events and their interactions with local weather conditions, taking into account the heterogeneous and cumulative e ects of weather patterns on economic growth and the asymmetry and nonlinearity in the global in uence of ENSO on economic activity. Using data on 75 countries over the period 1975{2014, we provide evidence for the negative growth e ects of ENSO events and show that there are substantial di erences between its warm (El Ni~no) and cold (La Ni~na) phases and between climate zones. These di erences are due to the heterogeneity in weather responses to ENSO events, known as teleconnections, which has so far not been taken into account by economists, and which will become more im-portant in the climate-economy relationship given that climate change may substantially strengthen long-distance relationships between weather patterns around the world. We also show that the negative growth e ects associated with these teleconnections are robust to the de nition of ENSO events and more important over shorter meteorological onsets

Suggested Citation

  • Remi Generoso & Cécile Couharde & Olivier Damette, 2020. "The effects on growth of El Nino and La Nina:local weather conditions matter," Bank of Estonia Working Papers wp2019-9, Bank of Estonia, revised 29 Jan 2020.
    • Handle: RePEc:eea:boewps:wp2019-9
    DOI: 10.23656/25045520/092019/0172
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    File URL: http://dx.doi.org/10.23656/25045520/092019/0172
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    More about this item

    Keywords

    economic growth; ENSO events; weather shocks; climate change;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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