Temperature shock and economic growth: Does spillover effect hurt more?

Pratik Thakkar (), Kausik Gangopadhyay () and Rupayan Pal
Additional contact information
Pratik Thakkar: Indira Gandhi Institute of Development Research
Kausik Gangopadhyay: Indian Institute of Management

Indira Gandhi Institute of Development Research, Mumbai Working Papers from Indira Gandhi Institute of Development Research, Mumbai, India

Abstract: In a trade-connected world, an adverse impact on economic growth on account of temperature shock in one economy may have a spillover effect on other economies. The current study quantitatively evaluates the impact of temperature shock on economic growth, during 1971--2019 for 168 economies, through direct and spillover channels. Our findings indicate that, while a temperature shock engenders an overall adverse effect on economic growth of all economies, only tropical economies experience a direct adverse effect, which is then transmitted to their non-tropical trade partners. The spillover effect is significant and more substantial for non-tropical economies than their direct effect. Among the sectors, the non-agriculture sector is sensitive to the spillover effect. Finally, the overall adverse effects on poor and rich economies hinge upon the direct and spillover effects, respectively. In our analysis, except for rich tropical economies, all experience an overall adverse effect.

Keywords: Temperature shock; Climate change; Direct effect; Spillover effect; Economic growth (search for similar items in EconPapers)
JEL-codes: F14 F18 O13 O14 Q54 Q56 (search for similar items in EconPapers)
Pages: 36 pages
Date: 2023-12
New Economics Papers: this item is included in nep-env and nep-gro
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.igidr.ac.in/pdf/publication/WP-2023-014.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ind:igiwpp:2023-014

Access Statistics for this paper

More papers in Indira Gandhi Institute of Development Research, Mumbai Working Papers from Indira Gandhi Institute of Development Research, Mumbai, India Contact information at EDIRC.
Bibliographic data for series maintained by Shamprasad M. Pujar ().