Temperature Fluctuations and Economic Conditions: Evidence from Weekly U.S. Data

Kimberly Berg, Chadwick Curtis and Nelson Mark

No 35529, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We study how temperature fluctuations affect U.S. state-level economic conditions using high frequency, weekly data from 1987 to 2024. The impulse response to a temperature shock from a panel local projection framework reveals a modest short-run increase in economic conditions followed by a delayed and persistent medium-run decline. Nonlinearities show that the medium-run decline is larger and more persistent at higher base temperatures. A decomposition of the economic conditions index points to the labor market as the primary channel. To interpret these findings, we develop a weekly labor search and matching model featuring a labor disutility channel, a heat damage stock, and a slow-moving adaptation mechanism.

JEL-codes: E23 Q54 Q56 (search for similar items in EconPapers)
Date: 2026-07
Note: EEE EFG
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