Rising Temperature, Nuanced Effects: Evidence from Seasonal and Sectoral Data

Ha Nguyen and Samuel Pienknagura

No 2024/202, IMF Working Papers from International Monetary Fund

Abstract: Using quarterly temperature and sectoral value-added data for a large sample of advanced economies (AEs) and emerging markets and developing economies (EMDEs), this paper uncovers nuanced effects of temperature on economic activity. For EMDEs, hotter spring and summer temperatures reduce growth in real value-added of manufacturing, and most significantly, of agriculture, while a warmer winter boosts it. For advanced countries (AEs), a hotter spring hurts growth in real value-added of all considered sectors: services, manufacturing and agriculture. For both country groups, the negative effect of a hotter spring is larger and more persistent than the positive effect of a warmer winter. Furthermore, the adverse impacts of hotter temperatures in advanced economies have accentuated in recent decades. This result suggests increased vulnerability to rising temperatures.

Keywords: climate change; temperature; economic growth; agriculture; summer temperature; emerging markets and developing economies; IMF working paper 24/202; quarterly temperature; seasonal temperature; Agricultural sector; Manufacturing; Emerging and frontier financial markets; Global (search for similar items in EconPapers)
Pages: 31
Date: 2024-09-20
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