Empirical Economics

, Volume 46, Issue 1, pp 1–18 | Cite as

Temperature, rainfall and economic growth in Africa

Article

Abstract

Following a recent line of research, this paper investigates the aggregated effects of temperature and rainfall on economic growth in Africa. Our econometric approach is based on a reduced-form model and takes account explicitly of parameter heterogeneity and cross section dependence, relying on ARDL modelling and panel estimators with multifactor structures. We find clear supportive evidence of short- and long-run relations between temperature and per-capita GDP growth, while the role played by rainfall appears to be less important and the evidence on its statistical significance is less clear-cut. Very similar results are reported when the analysis is carried out by focusing solely on Sub-Saharan African countries or considering GDP growth per worker. This evidence is in sharp contrast to the results obtained via standard MG estimation and this confirms that, by not controlling for cross section dependence, traditional panel estimators are likely to provide misleading inference. The empirical results suggest that, far from adapting quickly to weather shocks, African economies appear to be significantly damaged by them. In the absence of corrective measures, the current trends in climate change may impose a progressively heavier burden on African countries.

Keywords

Weather factors Economic growth Africa Panel estimators Multifactor modelling Cross section dependence 

Notes

Acknowledgments

The author would like to thank an anonymous Associate Editor of this journal and two anonymous referees for valuable comments and suggestions. The author is also grateful to Markus Eberhardt for many helpful observations. The usual disclaimer applies.

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Copyright information

© Springer-Verlag Berlin Heidelberg 2012

Authors and Affiliations

  1. 1.Dipartimento di Economia, Statistica, Matematica e Sociologia “V. Pareto”Università degli Studi di MessinaMessinaItaly

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