Rainfall and Economic Growth: Evidence from
Senegal
Abstract
In this paper, we simulate and evaluate the impact of extreme rainfall events on various sectors in the economy; factors of production remuneration and economic growth in Senegal. A dynamic general equilibrium model is developed which includes an index linking rainfall fluctuations to total productivity factor (TPF) and factor market. Based on rainfall trends during the past three decades, we run simulations to assess the effects of rainfall values on GDP growth. The results show that extreme events in rainfall pattern deeply affect GDP growth in Senegal; sharp drops in rainfall lead to declining GDP and periods of abundant rainfalls are marked by better performance in term of GDP. However, rainfall drops lead to losses in GDP growth in comparison to gains in GDP growth due to rainfall surplus