THE recent warm weather in the Northeast might not have been great for makers of winter coats, but the economy and markets could be poised for a small fillip.
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Putting agriculture aside, there are other potentially important macroeconomic effects, said Michael Greenstone, a professor of environmental economics at the Massachusetts Institute of Technology. “The basic idea is that extremes of temperatures, really hot and really cold, are dangerous for human health,” he said. “To the extent that the recent warm weather on the East Coast moved us from cold days to more moderate days, that’s likely to reduce mortality rates. Having more people around is obviously good for consumption and economic activity.”
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The temporary warm weather does have very real benefits for poor families.
A warm winter can relax their financial constraints by requiring less spending on heating, said Steven J. Haider, an associate professor of economics at Michigan State University.
“They often are making very tough decisions, whether those decisions are paying bills, child care, clothes or food during a particular month,” he said. “If there is a cold-weather shock, and their heating bill goes up in a particular month, there are poor people who struggle.”
Professor Haider and three colleagues researched the effect of weather on poor families’ budgets and found that there were substantial effects from extreme temperatures.
“For the short-run effects that we’re seeing this year, the answer is, yes, the poor families are feeling a little less constrained,” he said. “I’m sure the families have other important uses for that money.”
Indeed, lower demand for heating oil in the United States, along with rising inventories for other refined petroleum products, has helped to push crude oil prices down— a boon for the rest of the world, too.
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