Tyler Cowen pointed me toward an odd new research paper today. The authors set out to determine the effect on economic growth of changing temperatures, which they broke this into two parts: steadily changing temperatures (from global warming) and temporary temperature shocks.
Their basic finding is that temperature changes have had negative economic effects on rich countries and positive economic effects on poor countries. But why? Aside from the effects of being rich or poor, it turns out that the response to global warming is fairly random. Conversely, the response to a temperature shock depends on several things: "Positive growth responses to global temperature shocks are more likely for countries that are poorer, have experienced slower growth, are less educated (lower high school attainment), less open to trade, and more authoritarian."
Here's a map of the world showing how each country has responded to temperature changes five years after they happen:
The effect of global warming is pretty consistent. North America, Europe, and Southeast Asia show negative effects while Africa and Central Asia show mostly positive effects. Only South America is variable. The United States shows a negative effect from global warming but a positive effect from temporary shocks.
The most peculiar thing is the difference between neighboring countries, which is frequently large. Brazil, for example, has an extremely negative response to global warming while Peru and Bolivia both have extremely positive responses. There are plenty of other examples like this, where responses don't change smoothly but go from one extreme to the other just by crossing a border.
The authors have no explanation for any of this. They just report their findings. It's all very peculiar.
The difference between Peru and Brazil is a mountain range, not a border...
Or one might say “Culture, Language”…
Great
Skimmed over the paper. It is pretty dense but my sense is that they chose some unusual metrics into their study. The outcome seems pretty unlikely so I would not be inclined to put much stock into this unless replicated.
Steve
My best guess (take it with a grain of salt): the configuration of people and capital in rich countries is quite efficient, so when stuff is induced to move it makes the economy worse; but in poor countries, the configuration of people and capital is inefficient, with lots of people on low-tech subsistence farms who could be more productively employed elsewhere, so anything that gets people to move off the farm improves the economy.
I would suspect that the scattered results come from trying to correlate things that aren't causally related.
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There was a bit in New Scientist a few years ago noting how crop yields in the bread basket in the US were up double-digits (percentage) because of CO2 fertilization. Don't hear that on the news, though.
It's peculiar only if you start from the assumption that the effect described in the paper is real.
Without reason to believe that it is (and the authors make no real attempts at validation), all you're doing is trying to read the tea leaves of shoddy regression.