The Growth Effects of El Nino and La Nina: Local Weather Conditions Matter

This paper contributes to the climate-economy literature by analysing the role of weather patterns in influencing the transmission of global climate cycles to economic growth. More specifically, we focus on El Nino Southern Oscillation (ENSO) events and their interactions with local weather conditions, taking into account the heterogeneous and cumulative effects of weather patterns on economic growth and the asymmetry and nonlinearity in the global influence of ENSO on economic activity. Using data on 75 countries over the period 1975-2014, we provide evidence for the negative growth effects of ENSO events and show that there are substantial differences between its warm (El Nino) and cold (La Nina) phases and between climate zones. These differences are due to the heterogeneity in weather responses to ENSO events, known as teleconnections, which has so far not been taken into account by economists, and which will become more important in the climate-economy relationship given that climate change may substantially strengthen long-distance relationships between weather patterns around the world. We also show that the negative growth effects associated with these teleconnections are robust to the definition of ENSO events and more important over shorter meteorological onsets

The equilibrium exchange rates of European currencies and the transition to euro

The introduction of the euro raised two questions: what was the appropriate exchange rate of the European currencies for entry in the EMU? What were the main determinants of the external value of the euro? To bring some insight in the matter, the concept of equilibrium exchange rates was used, which illustrated the divergence between exchange rates and long run fundamentals. For each country, the equilibrium exchange rate was calculated from a simplified model of external trade which, in its reduced form, allows one to explicitly represent the structural determinants of exchange rates. To obtain supplementary results we also make an analysis of unit cost levels. The results suggest that although the central parities in force within the EMS were rather satisfactory and ought not to give rise subsequently to intra-European tensions, the European currencies were overvalued in terms of their equilibrium exchange rates and the dollar was undervalued. This misalignment thus provides support to justify the depreciation of the euro since its launch.

The growth effects of El Niño and La Niña: local weather conditions matter

This paper contributes to the climate-economy literature by analysing the role of weather patterns in influencing the transmission of global climate cycles to economic growth. More specifically, we focus on El Niño Southern Oscillation (ENSO) events and their interactions with local weather conditions, taking into account the heterogeneous and cumulative effects of weather patterns on economic growth and the asymmetry and nonlinearity in the global influence of ENSO on economic activity. Using data on 75 “teleconnected” countries over the period 1975-2014, we provide evidence for the negative growth effects of ENSO events and show that there are substantial differences between its warm (El Niño) and cold (La Niña) phases and between climate zones. These differences are due to the heterogeneity in weather responses to ENSO events, known as teleconnections, which has so far not been taken into account by economists, and which will become more important in the climate economy relationship given that climate change may substantially strengthen long-distance relationships between weather patterns around the world. We also show that the negative growth effects associated with these teleconnections are robust to the definition of ENSO events, to the use of alternative climatic variables and more important over shorter meteorological onsets

Les enjeux liés à la Mesure du Capital Naturel: L’exemple de la Nouvelle-Calédonie

Les indicateurs économiques standard, mis en place pour appréhender la richesse des pays, se révèlent insuffisants pour saisir l’importance qu’occupent les ressources naturelles dans le développement économique des nations. Pour faire face à cette insuffisance, la Banque Mondiale a développé un cadre analytique dans lequel le capital naturel est une des composantes de la richesse totale des pays. Dans cet article, nous appliquons le cadre comptable développé par la Banque Mondiale pour évaluer le capital naturel néo-calédonien et sa contribution à la richesse de la Nouvelle-Calédonie. Les résultats décrivent une économie fortement dotée en capital naturel et qui, dans une perspective internationale, se rapproche des autres économies rentières. Pour intégrer les spécificités du capital naturel de la Nouvelle-Calédonie, cet article propose également une extension de la méthode Banque Mondiale et procède à une nouvelle évaluation étendue du capital naturel néo-calédonienStandard economic indexes intending to capture the wealth of nations fail to capture the importance of natural resources for national economic development. In order to overcome this shortcoming, the World Bank have implemented an analytical framework taking account of natural capital as a component of the total wealth of countries. In this paper we implement the accounting framework of the World Bank for the evaluation of new-Caledonia natural capital and of its contribution to the total wealth of this island. Following our computations, new-Caledonia has a strong natural capital endowment, making it similar to other rental economies. In order to capture the peculiarities of the natural capital of new-Caledonia, this paper also expand the World Bank methodology and deliver a new extended evaluation of new-Caledonia natural capital.