The Long-Lived Effects of Historic Climate on the Wealth of Nations
John C. Bluedorn
International Monetary Fund (IMF) - Research Department
Cardiff Business School; Centre for Economic Policy Research (CEPR)
University of Southampton
CEPR Discussion Paper No. DP7572
We investigate the long-run consequences of historic, climatic temperatures (1730-2000) for the modern cross-country income distribution. Using a newly constructed dataset of climatic temperatures stretching over three centuries (18th, 19th, and 20th), we estimate a robust and significant time-varying, non-monotonic effect of climatic temperature upon current incomes for a cross-section of 167 countries. We find a large, positive effect of 18th century climatic temperature and an even larger, negative effect of 19th century climatic temperature upon current incomes. When historic, climatic temperature is introduced, the effect of 20th century climatic temperature on current income is either weakly positive or insignificant. Our findings are robust to various sub-samples, additional geographic controls, and alternative income measures. The negative relationship between current, climatic temperature and current income that is commonly estimated appears to reflect the long-run effect of climatic variations in the 18th and 19th centuries.
Number of Pages in PDF File: 38
Keywords: climate, economic performance, geography, history, temperature
JEL Classification: N50, O11, O40, O50, O57working papers series
Date posted: January 11, 2010
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