Climate Shocks and Exports

This paper uses international trade data toexamine the effects of climate shocks on economicactivity. At the aggregate level, MelissaDell, Benjamin F. Jones, and Benjamin A.Olken (2008) (hereafter, DJO) have demonstratedthat higher temperatures in a given yearreduce the growth rate of GDP per capita, butonly in poor countries. The analysis of tradedata in this paper builds on that finding, withthree principal motivations. First, internationaltrade links the fortunes of countries, providingpotentially important conduits for geographicallylimited climatic impacts to have globaleconomic effects. Second, international tradedata is the best available source for identifyingeconomic activity worldwide separately by narrowlydefined sectors. Examining internationaltrade data, one can thus say more preciselywhat sectors are affected by climatic changes.Finally, the trade data, collected by the importingcountry, provides a check on the potentiallylow-quality national accounts data provided bythe home country.