The economic effects of long-term climate change: evidence from the little ice age
Recent studies have consistently found important economic effects of year-to-year weather fluctuations. This paper studies the economic effects of long-term and gradual climate change, over a period of 250 years, when people have time to adapt. In particular, I study the effects of the Little Ice Age, a historical episode of long-term climate change. Results show significant negative economic effects of long-term climate change. Cities with good access to trade were substantially less affected. Results from yearly historical wheat prices and yield ratios show that temperature change impacted economic growth through its effect on agricultural productivity. Further evidence shows a lack of adaptation. I show evidence of the relevance of these results to the context of contemporary developing countries and recommend ways in which these findings may improve Integrated Assessment Models.