Temperature Fluctuations and Economic Conditions: Evidence from Weekly U.S. Data / Kimberly A. Berg, Chadwick C. Curtis, Nelson C. Mark.

Format:

Book

Author/Creator:

Berg, Kimberly A.

Contributor:

Curtis, Chadwick C.

Mark, Nelson C.

National Bureau of Economic Research.

Series:

Working Paper Series (National Bureau of Economic Research) no. w35529.

NBER working paper series no. w35529

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2026.

Summary:

We study how temperature fluctuations affect U.S. state-level economic conditions using high frequency, weekly data from 1987 to 2024. The impulse response to a temperature shock from a panel local projection framework reveals a modest short-run increase in economic conditions followed by a delayed and persistent medium-run decline. Nonlinearities show that the medium-run decline is larger and more persistent at higher base temperatures. A decomposition of the economic conditions index points to the labor market as the primary channel. To interpret these findings, we develop a weekly labor search and matching model featuring a labor disutility channel, a heat damage stock, and a slow-moving adaptation mechanism.

Notes:

July 2026.

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