Finance and Climate Resilience: Evidence from the long 1950s US Drought

Raghuram Rajan; Rodney Ramcharan

doi:10.3386/w31356

Finance and Climate Resilience: Evidence from the long 1950s US Drought

Raghuram Rajan & Rodney Ramcharan

Working Paper 31356

DOI 10.3386/w31356

Issue Date June 2023

Revision Date March 2025

The local availability of credit shaped whether, and how, farmers adapted to the long 1950s US drought. Investment in irrigation increased substantially more in drought-exposed areas with greater access to bank finance. Overall, these areas suffered significantly less population decline, both in the short- and long term. Thus, enhancing local access to finance can enable communities to adapt to large adverse climatic shocks, limiting outmigration.

We thank Viral Acharya, Charles Calomiris, Gernot Doppelhoffer, Phillip Hoffman, Matthew Jaremski, Matthew Kahn, Joseph Mason, Kelly Posenau, Phillip Strahan and various seminar participants for helpful comments. We had fantastic research support from Rahul Chauhan, Adarsh Kumar, Freddy Pinzon, and Justin Scott. Ramcharan benefitted from grants from the Lusk and IORB Centers. These views do not necessarily reflect those of the Federal Reserve System or the National Bureau of Economic Research.
Copy Citation

Raghuram Rajan and Rodney Ramcharan, "Finance and Climate Resilience: Evidence from the long 1950s US Drought," NBER Working Paper 31356 (2023), https://doi.org/10.3386/w31356.

Finance and Climate Resilience: Evidence from the long 1950s US Drought

Related

Topics

Programs

More from the NBER