Temperatures and Growth: A Panel Analysis of the United States
76 Pages Posted: 10 Jan 2015 Last revised: 9 Jun 2019
Date Written: March 30, 2018
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 1F 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.
Keywords: temperatures, growth, climate change, industry analysis
JEL Classification: O44, Q51, Q59, R11
Suggested Citation: Suggested Citation