Tropical Economics

Solomon M. Hsiang and Kyle Meng

American Economic Review, 2015, vol. 105, issue 5, 257-61

Abstract: Why wealth is systematically lower in the tropics remains a puzzle. We point out that latitude may have fundamental economic consequence because it plays a key role in how countries experience geophysical processes that have economic implications. We demonstrate that annual fluctuations in the El Nino Southern Oscillation (ENSO) leads to hotter and dryer local weather across tropical countries and subsequently to substantial losses in agricultural yields, output, and value-added. If volatility in agricultural production impedes economic growth, the relatively stronger influence of ENSO on the tropics may offer yet another partial explanation for slower historical growth in the tropics.

JEL-codes: O13 O47 Q11 Q54 (search for similar items in EconPapers)
Date: 2015
Note: DOI: 10.1257/aer.p20151030
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Citations: View citations in EconPapers (17)

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