The Effect of Heat Waves on Economic Activity: Evidence from Latin America

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Jul 2023
We document that extreme heat has an economically and statistically significant negative effect on economic growth in Latin America. In particular, we find that the magnitude of the negative impact is increasing in both the intensity and the duration of heat. Further, we find that the effect is driven by absolutely hot days (days above a given threshold in degrees Celsius) as opposed to days that are relatively hot for a given location (above a given number of standard deviations above the regions monthly mean temperature).