NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Goldilocks Economies? Temperature Stress and the Direct Impacts of Climate Change

Geoffrey Heal, Jisung Park

NBER Working Paper No. 21119
Issued in April 2015
NBER Program(s):   DEV   EEE   LS

We review recent literature on the effect of temperature stress on economic activity, operating through basic human physiology. There is growing evidence from both micro and macro studies of causal impacts of extreme temperature on health, labor supply, and labor productivity, driven in large part by extreme heat stress. There is also a suggestion of an optimal temperature zone for economic activity, though empirical research on potential adaptive responses remains thin. This emerging literature has implications for the consequence of climate change, and may also provide a partial explanation of why hot countries are generally poorer than temperate or cold ones.

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Document Object Identifier (DOI): 10.3386/w21119

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