Scholarly Comments on Academic Economics

Temperature and U.S. Economic Growth: Comment on Colacito, Hoffmann, and Phan

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Abstract

A recent paper in the Journal of Money, Credit and Banking claims to show that higher temperatures decrease the rate of economic growth in the United States. The paper is authored by Riccardo Colacito, Bridget Hoffmann, and Toan Phan (CHP). I criticize CHP’s method on two fundamental counts. Once those failings are rectified, their results dissolve. Also, using data from Krishna Khatri and Robert Tamura containing estimates of total real annual state output, I find that the sign of the effect is reversed, indicating that higher temperatures increase economic growth, although this effect also fails tests of statistical significance.