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Temperature and Growth: A Panel Analysis of the United States
Author(s) -
COLACITO RICCARDO,
HOFFMANN BRIDGET,
PHAN TOAN
Publication year - 2018
Publication title -
journal of money, credit and banking
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.763
H-Index - 108
eISSN - 1538-4616
pISSN - 0022-2879
DOI - 10.1111/jmcb.12574
Subject(s) - percentage point , economics , panel data , aggregate (composite) , environmental science , seasonal adjustment , annual growth % , econometrics , climatology , agricultural economics , mathematics , materials science , geology , mathematical analysis , finance , variable (mathematics) , composite material
We document that seasonal temperatures have significant and systematic effects on the U.S. economy, both at the aggregate level and across a wide cross section of economic sectors. This effect is particularly strong for the summer: a 1 o F increase in the average summer temperature is associated with a reduction in the annual growth rate of state‐level output of 0.15 to 0.25 percentage points. We combine our estimates with projected increases in seasonal temperatures and find that rising temperatures could reduce U.S. economic growth by up to one‐third over the next century.