Fig. 13

Impulse Response of TFP Growth to an intra-annual temp-vol shock in different regions (1975-2016). Notes: This figure presents Cholesky orthogonalized impulse responses of TFP growth to an intra-annual temperature volatility shock [\(\sigma (T)\)]. Impulse responses are obtained by estimating a panel VAR(1) (Eq. 1) using the Generalized Method of Moments (GMM). We order the variables in vector Y as follows: intra-annual temperature volatility, GDP growth, TFP growth (i.e., temperature volatility is the most exogenous variable). The lag order of the dependent variables to be used as instruments is chosen to be four. The panel VAR satisfies the stability conditions. Solid black lines: estimated impulse responses. Dashed lines: 90% bootstrapped confidence bands. Dotted lines: 68% bootstrapped confidence bands. Robust standard errors are computed by clustering standard errors at the country level. Data are annual and span the period from 1975 to 2016