Climate Change and Growth Dynamics

Rangan Gupta, Sarah Nandnaba () and Wei Jiang
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Sarah Nandnaba: Department of Economics, Ecole normale superieure (ENS) Paris-Saclay, 91190 Gif-sur-Yvette, France

No 202404, Working Papers from University of Pretoria, Department of Economics

Abstract: We develop an overlapping generations endogenous growth model characterized by climate change, with the latter being specified as a fraction of output lost due changes in temperature anomalies. We show that growth dynamics arise in this model when changes in temperature anomalies is a positive function current economic growth, with this theoretical specification motivated through extensive empirical analyses involving 167 countries over a long span of historical data covering 1851 to 2018. In particular, two distinct oscillatory growth dynamics emerge: one convergent and the other divergent, contingent on the strength of the response of global warming, i.e., changes in temperature anomalies to current economic growth. Our theoretical results suggest that policy makers should be cognizant of the fact that unless economic growth is “green†, rapid global warming can would put economies in a fluctating divergent balanced growth.

Keywords: Climate change; endogenous growth; dynamics (search for similar items in EconPapers)
JEL-codes: C23 O41 Q54 (search for similar items in EconPapers)
Pages: 11 pages
Date: 2024-02
New Economics Papers: this item is included in nep-dge, nep-ene, nep-env, nep-gro and nep-his
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Persistent link: https://EconPapers.repec.org/RePEc:pre:wpaper:202404

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