Temperature Shocks and Economic Growth: Evidence from the Last Half Century

This paper uses historical fluctuations in temperature within countries to identify its effects on aggregate economic outcomes. We find three primary results. First, higher temperatures substantially reduce economic growth in poor countries. Second, higher temperatures appear to reduce growth rates, not just the level of output. Third, higher temperatures have wide-ranging effects, reducing agricultural output, industrial output,and political stability. These findings inform debates over climate’s role in economicdevelopment and suggest the possibility of substantial negative impacts of highertemperatures on poor countries.