Economist: The colder the weather, the worse the economy?

"Temperature, the basic element of nature, is like a needle of time, quietly affecting the rhythm of human society and the pulse of the economy. ”

Text / Ba Jiuling (WeChat public account: Wu Xiaobo channel)

嘣！嘣！嘣！

Out-of-control cars collide head after tail like a curling stone, and each collision can cut the insurance company's heart. Several cars were even pushed onto the roofs of other cars, and a traffic policeman was hit by a "drifting" car and flew more than 10 meters away.

This is a traffic accident that occurred on February 23 on the Xingtang Elevated Highway in Suzhou Industrial Park. It is estimated that more than 100 vehicles were involved in the collision. It was the morning rush hour, and the "Su E" car owners rushed to work in the park, but they ignored an important safety hazard - the road surface was icy.

The main culprit of icy roads is freezing rain. The last time Suzhou car owners encountered it was 16 years ago.

After the end of the Spring Festival holiday, China did not usher in a small spring, but a large-scale cooling across the country. In Wuhan, Anhui and other places, people could wear short sleeves two days ago, but now overnight, the road has become an ice rink, and the ankle-high winter wheat has become an ice sculpture......

Combined with the snow disaster during the Spring Festival, the winter of 2023 seems to be exceptionally cold. According to statistics, in 2023, the south will experience the lowest temperature since 2009, while the national minimum temperature record has been refreshed again, while low-temperature freezing and snow disasters have caused direct economic losses of nearly 5 billion yuan.

Reflected in individuals, the biting wind and rain have caused difficulties in traveling, and people's willingness to go out to consume and work seems to have been greatly reduced.

This raises an interesting question: Is there a correlation between temperature and the economy, and does cold weather really bring about economic "cooling"?

temperature and the rise and fall of dynasties

If we turn our perspective to antiquity and examine the link between temperature and economy in the context of the history of Chinese civilization, we can see that temperature has played a key role in everything from natural disasters to the rise and fall of dynasties.

By looking at climate change, we can note that during periods of climate warming, Chinese dynasties often ushered in a prosperous era.

For example, the Eastern Han Dynasty from the first year to 200 AD, the reign of Zhenguan and the Kaiyuan Dynasty from 627 AD, and the Northern Song and Southern Song Dynasty from 960 to 1279 AD were all eras of relatively developed economies and stable social order.

In 1972, Academician Zhu Kezhen published a paper entitled "A Preliminary Study of China's Climate Change in the Past 5,000 Years", which included a chart showing China's climate change since the Qin and Han dynasties, providing us with a more intuitive perspective.

Of particular interest is the reign of Dazhong during the reign of Tang Xuanzong in the late Tang Dynasty, which was the last stable period of the Tang Dynasty.

When analyzing the reasons for the fall of the Tang Dynasty, one view in the current historiography is that Tang Xuanzong excessively used power and whitewashed the peace, which led to the outbreak of long-accumulated contradictions after his death and the end of the Tang Dynasty.

From the perspective of temperature, the period of the reign of Dazhong coincided with a temporary relief during the low temperature period, and then the temperature dropped again, triggering the Huangchao Uprising. Soon after, China entered a period of warlord melee in five dynasties and ten kingdoms.

Correspondingly, the great rule that followed the great chaos in history was often accompanied by a rise in the overall temperature. For example, the Zhaoxuan Zhongxing of the Han Dynasty, the Zhenguan of the Tang Dynasty, and the Jiayou of the Song Dynasty all occurred during the period of rising temperatures. This pattern has also been verified in subsequent history.

Although China entered the Xiaoice River period, which lasted for hundreds of years after the Song Dynasty, various "reigns" and "prosperous eras" of the Yuan, Ming, and Qing dynasties, such as the Hongwu, Wanli, and Kangqian dynasties, also occurred during periods of relatively high temperatures.

In ancient times, agriculture was the most important economic pillar, and the impact of climate on agriculture was extremely direct and significant. The policy of "valuing agriculture and suppressing commerce" in ancient China was not accidental, but based on its realistic agricultural foundation.

For the vast number of working people in ancient China, "being able to eat" has been the core demand for thousands of years.

Since most of China is located in temperate and subtropical zones, wheat and rice are extremely sensitive to temperature, and the success or failure of the harvest season also depends on the right climate. As a result, the overall temperature drop leads to the fragility of agroecology and the consequent decrease in society's tolerance for government policies.

In what could have been "barely maintained", the drop in temperature made it impossible to maintain the original way of life, and a large number of farmers became homeless. While the government's revenues are decreasing, it must open up a bailout, which leads to the destruction of the original political and economic balance.

Historically, this has often been the prelude to warlords at the top and popular uprisings at the bottom. Historical data can also be found that the famous peasant uprisings in Chinese history, such as the Huangchao Rebellion, Li Zicheng's uprising, and Hong Xiuquan's Taiping Rebellion, all occurred during the period when the climate became colder.

temperature and modern economy

Since the Industrial Revolution, agriculture has ceased to be the first pillar of the economy. So is the temperature still like before, and has the effect of "cold suppressing warmth"?

Economists at the Massachusetts Institute of Technology (MIT) analyzed nearly half a century of global economic data from 1950 to 2000 and found that the old calendar was no longer applicable. The impact of temperature on the economy is more complex.

Because modern production is often dependent on factories, high temperatures mean that people are more susceptible to being susceptible to reducing their productivity and cognitive abilities – commonly known as "dizzy heat".

In general, for every degree of rise in the average annual temperature, economic growth falls by 1.3 percent. This is particularly true in developing countries. Because the working environment in developing countries is generally worse than that in developed countries, the ability to cope with high temperatures is also weaker.

A factory that cools down with ice cubes on hot days

In the summer of 2019, many electronic component factories in Thailand had to reduce the working hours of their production lines, as the high temperature caused workers to fatigue easily and production efficiency dropped significantly. This not only impacts local economic output, but also creates fluctuations in global supply chains, highlighting the direct impact of rising temperatures on modern production efficiency.

And India often suffers from hot weather. In 2015, many parts of India experienced a severe heat wave, which not only affected GDP growth that year, but also exacerbated the rise in food prices in India, and caused a strain on medical resources, while social conflicts increased significantly during the same period.

In financial markets, the impact of temperature is even more subtle.

The cold may trigger psychological problems, such as mild winter depression (White Blue).

The winter blues may make people more reluctant to take risks when making investment decisions – that is, they are more likely to sell when prices are falling, and more reluctant to buy dips in the process. As a result, we tend to see greater market volatility and less market liquidity in the winter market.

However, if this tendency is understood, that is, when it is known that a sharp drop in temperature will cause a significant proportion of investors to suffer from the winter blues, then in turn this is a market feature that can be exploited.

Especially in the Nordic countries, where sunshine hours are short and the weather is cold, investors are more likely to show a conservative investment bias. Some institutional investors have chosen to reverse the trend in the winter, seizing the opportunity of the market overreaction and buying undervalued stocks to profit when sentiment picks up in the spring.

Temperature, the basic element of nature, is like a pointer of time, quietly affecting the rhythm of human society and the pulse of the economy. From ancient agrarian societies to modern industrial and financial systems, climate and temperature changes have always imperceptibly shaped human life and economic development.

As the bell of the new year officially rings, we stand at a new point in time. When we talk about temperature here, we are not just looking back at history, but also looking for wisdom and strategies that can guide us steadily in the future of change.

本篇作者 | 司马懿 | 责任编辑 | 何梦飞

主编 | 何梦飞 | 图源 | VCG