American Economic Review Vol. 105 No. 5 2015

Tropical Economics

Solomon Hsiang¹; Kyle C. Meng²

¹ University of California, Berkeley, 2607 Hearst Ave., Berkeley, CA 94720 (e-mail: ) · ² University of California, Santa Barbara, 4416 Bren Hall, Santa Barbara, CA 93106 (e-mail: )

Abstract

Why wealth is systematically lower in the tropics remains a puzzle. We point out that latitude may have fundamental economic consequence because it plays a key role in how countries experience geophysical processes that have economic implications. We demonstrate that annual fluctuations in the El Nino Southern Oscillation (ENSO) leads to hotter and dryer local weather across tropical countries and subsequently to substantial losses in agricultural yields, output, and value-added. If volatility in agricultural production impedes economic growth, the relatively stronger influence of ENSO on the tropics may offer yet another partial explanation for slower historical growth in the tropics.

DOI

10.1257/aer.p20151030

Volume

105

Issue

5

Pages

257-261

Language

en

Sources

bibtex:phds-export.bib openalex crossref

Cite

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