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Seasonal temperature variability and economic cycles

Linsenmeier, Manuel (2024) Seasonal temperature variability and economic cycles. Journal of Macroeconomics, 79. ISSN 0164-0704

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Identification Number: 10.1016/j.jmacro.2023.103568

Abstract

This study examines the role of temperature as a driver of seasonal economic cycles. The study first presents a novel dataset of seasonal temperature and seasonal GDP. Stylised facts show that seasonal economic cycles are much more diverse than previous research suggested. The study then attributes seasonal economic cycles to temperature variability. For causal identification, the study proposes a novel econometric approach that accounts for expectations. The results suggest that seasonal temperature has a statistically significantly positive and economically large effect on seasonal GDP. Overall, a substantial share of seasonality in GDP timeseries appears to be due to weather. For a subsample of European countries, the effect of temperature can be attributed to sectors that are relatively more exposed to ambient environmental conditions. Projections of climate change suggest that seasonal economic cycles might substantially change in the future, with larger cycles expected for about half of the countries in the sample.

Item Type: Article
Official URL: https://www.sciencedirect.com/journal/journal-of-m...
Additional Information: © 2023 The Author
Divisions: Geography & Environment
Subjects: H Social Sciences > HB Economic Theory
JEL classification: Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics > Q5 - Environmental Economics > Q54 - Climate; Natural Disasters
E - Macroeconomics and Monetary Economics > E3 - Prices, Business Fluctuations, and Cycles > E32 - Business Fluctuations; Cycles
E - Macroeconomics and Monetary Economics > E2 - Consumption, Saving, Production, Employment, and Investment > E23 - Production
Date Deposited: 06 Nov 2023 11:36
Last Modified: 23 Feb 2024 18:09
URI: http://eprints.lse.ac.uk/id/eprint/120640

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