Wednesday, September 19, 2012

Rise in temperatures 'slows economy in poor countries'

According to a study by US economists, small increases in temperature may have reduced the industrial and agricultural production of poor countries.  The authors compared annual temperature and precipitation changes from 1950 to 2003 with aggregate economic output data. Based on the data, the researchers estimated that a one degree Celsius rise in temperature in a given year had reduced economic growth by about 1.3 percentage points on average.  By correlating the temperature and precipitation data with regular changes of government, such as elections, and irregular changes, such as coups, the researchers found that higher temperatures are also associated with political instability in poor countries.  The impact of temperature on political instability may be "one mechanism through which temperature might affect productivity growth", according to the paper. But further work is needed to determine why both a country's economy and its political stability are affected by temperature, the authors said.

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