Ironman at Political Calculations asserts it does. Unfortunately, he makes a mistake in calculating Kansas GDP ex.-agriculture by simply subtracting chained agriculture from chained state GDP (discussed in the addendum to this post). Here in Figure 1 is properly calculated GDP ex.-agriculture plotted against a drought index (lower values is a more severe drought).
Figure 1: Palmer drought severity index (PDSI) for Kansas (blue, left scale), and Kansas GDP in millions of Ch.2009$, SAAR (black, right log scale), and ex.-agriculture (red, right log scale), calculated using Törnqvist approximation. NBER defined recession dates shaded gray. Lower values of PDSI indicate more severe drought. Source: BEA (2015Q4 first state GDP release), NOAA, and author’s calculations. Graph updated to include 2016Q1 state GDP data, 2nd release, 8/11, 9:10AM Pacific.
Note that the slowdown is apparent in GDP excluding agriculture, post-Brownback. Drought is not the explanation. And as shown in this post, a hit to durables from the downturn in aircraft cannot be the answer.
Update, 8/11 9:50AM Pacific: Here is an updated graph of Kansas economic performance relative to US.
Figure 2: Log US GDP (blue), and Kansas (red), all in Ch.2009$, 2011Q1=09. NBER defined recession dates shaded gray. Source: BEA, 2016Q2 advance release, BEA state 2016Q1 second release, NBER, and author’s calcuations.
Update, 8/11, 11:15AM Pacific: By the way, still waitin’ (CBPP) for the response to the “shot of adrenaline”.
Update, 8/12, 6:15PM Pacific: Ironman asserts:
The effects of extreme drought that year would also negatively impact the state’s non-durable goods manufacturing sector, as mills in the state would have less grain to process into flour, particularly in the quarters following the main harvest, which is also evident in the detailed state-level GDP data.
Here is a time series plot of the real agricultural and nondurable manufacturing value added series.
Figure 3: Palmer drought severity index (PDSI) for Kansas (blue, left scale), and Kansas agricultural value added (red, right log scale), and nondurable manufacturing (green, right log scale), in millions of Ch.2009$, SAAR. NBER defined recession dates shaded gray. Lower values of PDSI indicate more severe drought. Source: BEA (2015Q4 first state GDP release), NOAA, and author’s calculations.
Note that agricultural output declines even as the drought lessens, and overall nondurable manufacturing holds up pretty well throughout the drought.