Year: 2026
Type: book-chapter
Abstract: I propose a new conceptual framework to disentangle the impacts of weather and climate on economic activity and growth: A stochastic frontier model with climate in the production frontier and weather shocks as a source of inefficiency. I test it on a sample of 160 countries over the period 1950–2014. Temperature and rainfall determine production possibilities in both rich and poor countries, positively in cold countries and negatively in hot ones. Weather anomalies reduce inefficiency in rich countries but increase inefficiency in poor and hot countries and more so in countries with low weather variability. The climate effect is larger than the weather effect.
Author: Richard S. J. Tol
Institutions: Colorado School of Mines, Tinbergen Institute
Language: English
Subfield: Economics and Econometrics
Domain: Social Sciences
SDG: Climate action
Open Access status: green
OpenAlex ID: W3142246151