Climatic differences and Economic Growth across Italian Provinces: First Empirical Evidence

Abstract

The purpose of this study consists in verifying if climatic differences can help to explain the different economic growths path across Italian provinces. Focusing on literature on economic convergence on one hand, and that on economics of climate on the other, the work depicts how climatic variables can enter into the traditional Solows neoclassical growth model developing two alternative models. Afterwards, it tests whether climatic characteristics actually exert an influence on economic convergence using an original climate dataset composed by average yearly min and max temperatures (C), humidity grade (%), number of frost-days and annual precipitations (mm) for 58 Italian Provinces uniformly distributed over the Peninsula. The results, obtained through the Arellano-Bond GMM estimator, show how some of climatic variables employed in this study actually affect the level of Provincial income.Climate; Economic growth; Convergence; Italian Provinces