Weather and Income: Lessons from the Main European Regions

Some recent papers by Dell et al. (2009) and Dell et al. (2012) (DJO) relating weather and economic outcomes, have delivered meaningful messages with clear implications to the effects of a changing climate. In a nutshell, the authors claim that a 1°C increase in global average temperatures would harm both the level and growth capacities of relatively poor countries, leaving rich countries basically unaffected. In this study, we make use of a detailed weather and economic dataset covering the main regions of the five largest economies in the Euro area in an attempt to refute the previous affirmation. In particular, we find in our sample that global warming affects, although in a modest manner, all regions within well-developed countries in the long-term (level effect). As in DJO, the level effect in poor regions is exacerbated. The latter regions also suffer from a slight negative short-term effect (growth effect). We claim also that the larger short-time response of these regions to a climate shock is partially adapted in the long-run.


Issue Date:
May 05 2015
Publication Type:
Working or Discussion Paper
PURL Identifier:
http://purl.umn.edu/202979
Total Pages:
62
JEL Codes:
O1; O4; Q51; Q54; Q59; R11
Series Statement:
CCSD
039.2015




 Record created 2017-04-01, last modified 2017-08-22

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