Sweden's Great Escape: Industrialization and The Changing Productivity Cost of Winter

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Taylor, Charlotte; Anttila-Hughes, Jesse
climate; growth; development; sweden; north atlantic oscillation; Growth and Development
thesis / dissertation description
We combine a paleoclimate reconstruction of the North Atlantic Oscillation (NAO)- a key determinant of Scandinavian winter intensity- with four centuries of historical production data from Sweden, to examine the changing influence of climate variability on production over time. We find the colder, drier winters associated with the negative phase of the NAO led to reduced economic production for much of Swedish history, and that this relationship changed with development: during industrialization, Sweden underwent a transition from ‘level’ effects, where harsh winters lowered average incomes, to ‘growth’ effects, where it reduced growth in improving living standards. Post-industrialization, neither ‘level’ nor ‘growth’ effects remain. We use sectoral production data to show that the growth effects uncovered in the industrialization period are strongest in the sectors of the economy most exposed to the climate and of greatest importance to the industrialization process, namely, transport, manufacturing and construction.