Temperature and GDP: A review of climate econometrics analysis

Jun-Jie Chang, Zhifu Mi and Yi-Ming Wei

Structural Change and Economic Dynamics, 2023, vol. 66, issue C, 383-392

Abstract: Climate econometric analysis of the relationship between temperature and gross domestic product (GDP) is increasingly being used to evaluate climate risks and understand economic impacts caused by climate change. We review the literature on growth and level effects (i.e., temperature rise respectively affects the growth and level of economic output), the setting of temperature variables’ forms and functional forms, and the inherent model specification of climate econometrics. Additionally, we introduce an approach for combining empirical findings with climate change integrated assessment models (IAMs) to improve damage modelling. Our findings show that estimates of damage through growth effects are generally much larger than those through level effects. Diverse impact mechanisms and adaptation effects can be revealed by changing the time resolution of temperature variables, introducing non-linearity into econometrics functions, and specifying temperature deviation. Combing the cross-sectional and panel model would enable us to examine the economic impacts at different future times.

Keywords: Climate change; Temperature; GDP; Climate econometrics; Integrated assessment model (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0954349X23000802
Full text for ScienceDirect subscribers only

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:eee:streco:v:66:y:2023:i:c:p:383-392

DOI: 10.1016/j.strueco.2023.05.009

Access Statistics for this article

Structural Change and Economic Dynamics is currently edited by F. Duchin, H. Hagemann, M. Landesmann, R. Scazzieri, A. Steenge and B. Verspagen

More articles in Structural Change and Economic Dynamics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().