Research
Research
Modern developing economies appear substantially more resilient to temperature shocks than historical agricultural economies, yet little is known about climate vulnerability before the spread of synthetic fertilisers, modern irrigation, and other buffering technologies. This paper estimates the causal effect of temperature shocks on provincial GDP per capita growth in Spain between 1904 and 1934, a period in which agriculture remained a dominant sector and production relied predominantly on organic farming systems. Using weather shocks extracted as innovations from province-specific autoregressions, I find that a 1°C temperature shock reduced provincial GDP growth by 3.3 to 3.4 percentage points, more than twice the effect typically estimated for poor modern economies. These damages were concentrated in the most arid provinces and remained large after accounting for income, agricultural dependence, land tenure structure, and crop composition. The results suggest that modern estimates may substantially understate climate vulnerability in agricultural economies with limited adaptive capacity, particularly in regions facing chronic ecological water stress.
This paper asks whether fertility remained responsive to economic conditions during the French fertility transition. Using a panel of 80 French départements between 1851 and 1911, I exploit within-département variation in temperature to examine how local economic conditions affected demographic behaviour after fertility decline was already underway. Warmer periods were associated with higher fertility: a typical temperature fluctuation increased the Coale fertility index by around 5 per cent. The results are robust to a range of specifications and inference procedures. Higher temperatures also reduced wheat prices, increased marriage among young adults, and generated larger fertility responses in more agricultural départements. Although the estimates do not explain the causes of long-run fertility decline, they suggest that fertility remained responsive to local economic conditions during one of the earliest demographic transitions.
This paper estimates the causal effect of temperature shocks on wages across nine occupations in Spain between 1915 and 1931, tracing how an agricultural supply shock propagated through the occupational structure of an organic farming economy. Following Nath et al. (2024), we extract temperature shocks as innovations from province-specific autoregressions and estimate dynamic wage responses using local projections over a five- year horizon, retaining peak and off-peak wages separately to identify the transmission mechanism. Agricultural wages bear the largest and most persistent losses, falling by 0.153 log points at h = 1 with no reversion across the full horizon. Urban wages follow with a one- to-two-year lag, concentrated in construction trades and craft occupations most exposed to rural purchasing power, while stonemasons and shoemakers are largely unaffected. Nominal wage adjustment accounts for 65 to 94 percent of the real wage decline across affected occupation-horizon cells, with rising prices compounding rather than cushioning nominal losses. We rule out aggregate demand contraction as a mechanism: both rural and urban price indices rise contemporaneously with the shock, inconsistent with a demand-driven fall in wages and prices together. Formal tests of seasonal symmetry find no evidence that peak wages respond more strongly than off-peak wages, rendering seasonal labour market integration an unlikely primary channel. The timing, sequential occupational pattern, and price evidence are consistent with an agricultural supply shock operating through an income channel, in which harvest shortfalls reduce rural purchasing power and contract demand for the goods and services that urban craft workers produce.
This paper constructs and characterizes a provincial-level dataset of seasonal temperature and precipitation covering 48 Spanish provinces over 1500–2000, drawing on the reconstructions of Luterbacher et al. (2004), Xoplaki et al. (2005), and Pauling et al. (2006). Principal component analysis documents a fundamental asymmetry in the dataset’s spatial structure: temperature variation is overwhelmingly driven by a common national signal, while precipitation is substantially more spatially fragmented, particularly in summer. Three historically documented climate episodes are examined against these structural findings and are consistent with them, illustrating the reconstruction’s ability to recover known climate signals at provincial resolution, though as large, well-documented events they offer a necessary rather than sufficient test of reliability. The dataset is best suited to informing the climatic structure of the pre-industrial period directly, and to linking climate to provincial economic outcomes from the late nineteenth century onward, once consistent provincial economic data become available.
Environmental Shocks and Bank Funding Stress: Evidence from the National Banking Era (with Luisa Bicalho-Ritzkat LSE)
Physical environmental risk is viewed as a source of financial instability, yet evidence on realised bank failure remains limited. We study the U.S. National Banking Era (1867–1904), when branching restrictions limited diversification and no lender of last resort existed. Combining weather measures with 110,831 bank-year observations covering 6,525 national banks, we find that a 100mm rainfall shortfall raises failure probability by 0.24–0.30 percentage points, equivalent to 60–75 percent of the unconditional annual failure rate. Failure risk increases sharply with drought severity. Rainfall shortfalls are followed by lower deposits, depleted cash and reserve-agent balances, and greater reliance on noncore funding, principally rediscounts. Initial conditions shape banks’ exposure: noncore dependence amplifies rainfall-induced failure, whereas larger reserve buffers attenuate it. Capital and solvency predict failure risk but do not independently moderate rainfall exposure. The results identify a funding-liquidity channel through which environmental shocks culminate in realised bank failure.