
Why Are Cold Countries Richer Than Hot Countries?
Economics Explained
00:00
The Spurious Correlation Between Temperature and Economic Prosperity
Just because something lines up doesn't mean that there is anything useful to be discerned from the relationship. This is called a spurious correlation. Given that there is no hidden variable between temperature and GDP, it is safe to conclude that this correlation is not spurious. If we were to look at the correlation of temperature and wealth 2000 years ago, you'd actually get the opposite result. Hotter nations were richer, so why did this change? It changed because global industries changed.
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