Temperature and Growth: A Panel Analysis of the United States

55 Pages Posted: 25 Apr 2017

Date Written: May 2016

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 cross-section of economic sectors. This effect is particularly strong for the summer: an increase of 1oF 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.

Keywords: Climate change, Growth

JEL Classification: O44, Q51, Q59, R11

Suggested Citation

Hoffmann, Bridget, Temperature and Growth: A Panel Analysis of the United States (May 2016). IDB Working Paper No. IDB-WP-676. Available at SSRN: https://ssrn.com/abstract=2956687 or http://dx.doi.org/10.2139/ssrn.2956687

Bridget Hoffmann

Inter-American Development Bank ( email )

1300 New York Ave., NW
Washington, DC 20577
United States

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