Michael Batu, Zichun ZhaoEconomics professor Michael Batu and master’s student Zichun Zhao have found that solar activity affects world economies.

Economists link solar activity to decrease in production

Two UWindsor researchers have shown that the sun’s wrath can affect your nation’s pocketbook.

Economics professor Michael Batu and master’s student Zichun Zhao have found that solar activity has a small but statistically significant effect on world economies.

The gross domestic product of the 34 member countries of the Organization for Economic Co-operation and Development decreases as solar activity increases, Zhao and Dr. Batu have demonstrated. On average, GDP decreases by at least 0.06 per cent for every increase of one per cent in solar activity, according to their research.

The correlation is most acute in the information and communication sector where a one per cent increase in solar activity lowers production by 1.07 per cent.

“Our study contributes to the larger empirical literature on the social and economic effects of geophysical and meteorological phenomena,” said Batu.

“While the study of space weather is a rapidly growing field, academic work to assess its overall social and economic impacts is in its infancy.”

Space weather phenomena can interfere with broadcasting, telecommunications, navigation, and power distribution, Batu explained. This is especially true at northern latitudes, he said.

The study uses data on sunspots published by the Royal Observatory of Belgium as a measure of solar activity since sunspots are often accompanied by solar flares and coronal mass ejections which send charged particles hurtling toward Earth, causing geomagnetic storms. Such storms are known to cause power outages; disrupt satellite, radio, and cellular communications; and wreak havoc at airports leading to cancelled flights.

The study is entitled From Space to Earth: Economic Effects of Solar Activity. Batu said he came up with the idea for the paper last fall and he and Zhao began gathering data in December.

Batu submitted the paper for presentation at the Canadian Economics Association’s 53rd annual conference, May 31 to June 2. Thanks to the financial support from UWindsor’s department of economics, professor Christian Trudeau, and the Graduate Students Society, Zhao is accompanying Batu to the event in Banff, Alberta, to present the research.

Under Batu’s supervision, Zhao completed a major research paper on a subset of the data dealing with the impact of geomagnetic storms on Canada’s economy.

─ Sarah Sacheli