Did Global Warming Cause the Global Slowdown?
NATIONAL PUBLIC RADIO -- New research suggests that higher temperatures can have a damaging effect on the economies of poor countries. The study, by economists at the Massachusetts Institute of Technology, found that in years with higher temperatures, poor countries experienced significantly slower economic growth.
Ben Olken, an associate professor of economics at MIT, and his colleagues wanted to examine the temperature connection more closely. They decided that instead of comparing one country to another, they would look within countries. Did a hot year mean slower economic growth? The answer appears to be yes. They found that for poor countries, an increase in annual average temperature by 1 degree centigrade corresponded to a 1.1% drop in per-capita gross domestic product.
It's "a huge effect," Olken says. The difference between a country that's in recession and one that is buzzing along amounts to a 3% shift in GDP. "So, 1 degree explaining a 1.1% shift is a huge effect of temperature."