IMF Working Papers

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

By Ha Nguyen, Samuel Pienknagura

September 20, 2024

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Format: Chicago

Ha Nguyen, and Samuel Pienknagura. "Rising Temperature, Nuanced Effects: Evidence from Seasonal and Sectoral Data", IMF Working Papers 2024, 202 (2024), accessed November 11, 2024, https://doi.org/10.5089/9798400289248.001

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Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

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.

Subject: Agricultural sector, Climate change, Economic sectors, Environment, Manufacturing

Keywords: Agricultural sector, Agriculture, Climate change, Climate change, Economic growth, Manufacturing, Temperature

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