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Temperature and Growth: A Panel Analysis of the United States

Author

Listed:
  • Colacito, Riccardo
  • Hoffmann, Bridget
  • Phan, Toan
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.

Suggested Citation

  • Colacito, Riccardo & Hoffmann, Bridget & Phan, Toan, 2016. "Temperature and Growth: A Panel Analysis of the United States," IDB Publications (Working Papers) 7654, Inter-American Development Bank.
    • Handle: RePEc:idb:brikps:7654
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    References listed on IDEAS

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    More about this item

    Keywords

    labor productivity; economic impact; economic growth;
    All these keywords.

    JEL classification:

    • O44 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Environment and Growth
    • O51 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - U.S.; Canada
    • Q59 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Other
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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