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The effects on growth of El Nino and La Nina:local weather conditions matter

Remi Generoso (), Cécile Couharde and Olivier Damette

No wp2019-9, Bank of Estonia Working Papers from Bank of Estonia

Abstract: This paper contributes to the climate-economy literature by analysing the role of weather patterns in in uencing the transmission of global climate cycles to economic growth. More speci cally, we focus on El Ni~no Southern Oscillation (ENSO) events and their interactions with local weather conditions, taking into account the heterogeneous and cumulative e ects of weather patterns on economic growth and the asymmetry and nonlinearity in the global in uence of ENSO on economic activity. Using data on 75 countries over the period 1975{2014, we provide evidence for the negative growth e ects of ENSO events and show that there are substantial di erences between its warm (El Ni~no) and cold (La Ni~na) phases and between climate zones. These di erences are due to the heterogeneity in weather responses to ENSO events, known as teleconnections, which has so far not been taken into account by economists, and which will become more im-portant in the climate-economy relationship given that climate change may substantially strengthen long-distance relationships between weather patterns around the world. We also show that the negative growth e ects associated with these teleconnections are robust to the de nition of ENSO events and more important over shorter meteorological onsets

Keywords: economic growth; ENSO events; weather shocks; climate change (search for similar items in EconPapers)
JEL-codes: C33 O40 Q54 (search for similar items in EconPapers)
Date: 2020-01-29, Revised 2020-01-29
New Economics Papers: this item is included in nep-env
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