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GDP and Temperature: Evidence on Cross-Country Response Heterogeneity

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  • Kimberly A. Berg
  • Chadwick C. Curtis
  • Nelson Mark

Abstract

We use local projections to estimate the cross-country distribution of real GDP per capita growth impulse responses to global and idiosyncratic temperature shocks. Negative growth responses to global temperature at longer horizons are found for all Group of Seven countries while positive responses are found for seven of the nine poorest countries. Global temperature shocks have negative effects on growth for around half of the countries and seemingly anomalous positive effects for the other half. After controlling for latitude and average temperature, positive growth responses to global temperature shocks are more likely for countries that are poorer, have experienced slower growth, are less educated (lower high school attainment), less open to trade, and more authoritarian.

Suggested Citation

  • Kimberly A. Berg & Chadwick C. Curtis & Nelson Mark, 2023. "GDP and Temperature: Evidence on Cross-Country Response Heterogeneity," NBER Working Papers 31327, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:31327
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    1. Tobias Kranz & Hamza Bennani & Matthias Neuenkirch, 2024. "Monetary Policy and Climate Change: Challenges and the Role of Major Central Banks," Research Papers in Economics 2024-01, University of Trier, Department of Economics.

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    JEL classification:

    • E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O50 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - General

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