Journal of Economic Growth

, Volume 6, Issue 3, pp 167–186 | Cite as

Climate and Scale in Economic Growth

  • William A. Masters
  • Margaret S. McMillan


This paper introduces new data on climatic conditions to empirical tests of growth theories. We find that, since 1960, temperate countries have converged towards high levels of income while tropical nations have converged towards various income levels associated with economic scale and the extent of the market. These results hold 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.

growth accounting empirical growth models endogenous growth 


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Copyright information

© Kluwer Academic Publishers 2001

Authors and Affiliations

  • William A. Masters
    • 1
  • Margaret S. McMillan
    • 2
  1. 1.Department of Agricultural EconomicsPurdue UniversityUSA
  2. 2.Department of EconomicsTufts UniversityUSA

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