Climate change and economic growth: a heterogeneous panel data approach
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Climate change is a global phenomenon. Its impact on economic growth must therefore be analyzed in accordance with its (time-varying) common effects. We present an econometric analysis that evaluates this effect taking into account its global nature. Contrary to previous evidence that ignores the global effects, we obtain that the rising temperature has not decreased growth in real GDP per capita in the second half of the twentieth century for the world countries. However, we obtain a negative effect of rising temperatures and a positive effect of rising precipitation in poor countries. This positive effect of rising precipitation is also confirmed for hot and temperate countries.
KeywordsGlobal warming Temperature Precipitation Economic growth Industrial output
Tiago Neves Sequeira (CEFAGE-UBI has financial support from FCT, Portugal, and FEDER/COMPETE 2020, through grant UID/ECO/04007/2013 (POCI-01-0145-FEDER-007659)).
Marcelo Serra Santos (CEFAGE-UBI has financial support from FCT, Portugal, and FEDER/COMPETE 2020, through grant UID/ECO/04007/2013 (POCI-01-0145-FEDER-007659)).
Manuela Magalhães received financial support from FCT (via POCI, project number 24068/2005), from the University of Warwick, from the University of Alicante, and from the Spanish Ministry of Economics and Competition (ECO2012-36719).
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