Climate and Scale in Economic Growth

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  • 1 January 2000
    • preprint
      • Published in RePEc
Abstract
This paper introduces new data on climatic conditions to empirical tests of growth theories. We find that, since 1960, temperate countries have converged towards a common high level of income while tropical nations have converged towards various income levels associated with economic scale and the extent of the market. These results for a wide range of tests. A plausible explanation is that temperate regions' growth was assisted by their climate, perhaps historically for their transition out of agriculture into sectors whose productivity converges across countries, while tropical countries' growth is relatively more dependent on gains from specialization and trade.

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