Work

Spatial Correlation, Trade, and Inequality: Evidence from the Global Climate

Year: 2019

Type: report

Abstract: Global phenomena, such as climate change, often have local impacts that are spatially correlated.We show that greater spatial correlation of productivities can increase international inequality by increasing the correlation between a country's productivity and its gains from trade.We confirm this prediction using a half-century of exogenous variation in the spatial correlation of agricultural productivities induced by a global climatic phenomenon.We introduce this generalequilibrium effect into projections of climate-change impacts that typically omit spatial linkages and therefore do not account for the global scope of climate change.We project greater international inequality, with higher welfare losses across Africa.

Source: National Bureau of Economic Research

DOI: 10.3386/w25447

Authors: Jonathan Dingel, Kyle Meng, Solomon Hsiang

Institutions: National Bureau of Economic Research, University of California, Santa Barbara, University of Chicago, University of California, Berkeley

Language: English

Topic: Global trade and economics

Subfield: General Economics, Econometrics and Finance

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDGs: Reduced inequalities, Climate action

Open Access status: green

Funders: University of Chicago, Booth School of Business, University of Chicago

OpenAlex ID: W2909436256

Cites: 103

Cited by: 21

Related to: 10