Is temperature adversely related to economic development? Evidence on the short-run and the long-run links from sub-national data

• DOI: 10.1016/j.eneco.2024.107758
• Publication Date: 2024-07-10T18:45:12Z
• Authors: Daniel Meierrieks; David Stadelmann
• Keywords: Per capita income; Vulnerability

We examine the effect of rising temperatures on regional economic development, using annual sub-national data for over 1500 regions in 152 countries between 1990 and 2017. In a panel setting with region- country-year fixed effects, we find no evidence homogeneous or heterogeneous development as measured by per capita income. Additionally, non-linear relationship temperature development. also employ long-difference approach that is attuned to exploring long-run Results indicate have negative impact income minority located weak economic, legal political institutions. Furthermore, these vulnerable experience decline long-term population human capital The use alternative GDP from 1950 onwards yields similar empirical results. Our findings suggest effects increase time, only becoming apparent long run already disadvantaged countries. Thus, country-specific conditions may moderate vulnerability future increases due global climate change.