The Economic Impact of Weather and Climate

Arbeitspapier

I propose a new conceptual framework to disentangle the impacts of weather and climate on economic activity and growth: A stochastic frontier model with climate in the production frontier and weather shocks as a source of inefficiency. I test it on a sample of 160 countries over the period 1950-2014. Temperature and rainfall determine production possibilities in both rich and poor countries; positively in cold countries and negatively in hot ones. Weather anomalies reduce inefficiency in rich countries but increase inefficiency in poor and hot countries; and more so in countries with low weather variability. The climate effect is larger that the weather effect.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 8946

Classification and Topics

• Classification: Wirtschaft ; Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity ; Environment and Growth ; Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence ; Climate; Natural Disasters and Their Management; Global Warming
• Subject: climate change ; weather shocks ; economic growth ; stochastic frontier analysis

Contributors, Location and Time

• Event: Geistige Schöpfung
• (who): Tol, Richard S. J.
• Event: Veröffentlichung
• (who): Center for Economic Studies and Ifo Institute (CESifo)
• (where): Munich
• (when): 2021

Further information

• Handle: http://hdl.handle.net/10419/235316
• Last update: 10.03.2025, 11:45 AM CET