Temperature%20and%20Growth%3A%0D%0AA%20Panel%20Analysis%20of%20the%20United%20States

Working Papers

Temperature and Growth: A Panel Analysis of the United States


CODE: IDB-WP-676
AUTHOR(s): Colacito, Riccardo , Hoffmann, Bridget , Phan, Toan
PUBLISHED: May 2016
LANGUAGE: English
RELATED TOPICS: Macroeconomics
DOWNLOAD FILE IN: English

Abstract:

This paper documents that seasonal temperatures have significant and systematic effects on the U.S. economy, both at the aggregate level and across a wide crosssection of economic sectors. This effect is particularly strong for the summer: an increase of 1°F 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. When these estimates are combined with projected increases in seasonal temperatures it is found that a reduction of U.S. economic growth by up to one third could occur over the next century.

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