The effect of climate fluctuation on output in developing countries

Abstract

Climate change is one of the critical problems in recent years on over the world. It impacts on many aspects of human life, that has a lot of researches and evident. This paper has analysis the effect of climate change on the aggregate output particularly with two typical elements: temperature and precipitation in developing countries. Besides, control variables proxy unobserved effects at country level and country fixed effects are also counted in the relationship of temperature and precipitation with the country’s output. The finding shows that both temperature and precipitation have significant influence on the GDP of developing countries. It is specially that temperature affects the GDP in U-shaped, while precipitation affects the GDP in hump-shaped. Moreover, this paper also conducts the relationship of temperature and precipitation with the output by two characteristics: “hot country” and “agricultural country”. The results are also significant; however, the relationship share cannot be identified. Further, this research suggests some adaptive recommendations for production to changing of climate.