Resource Booms and the Macroeconomy: The Case of U.S. Shale OilSeptember 22, 2017
We examine the implications of the U.S. shale oil boom for the U.S. economy, trade balances, and the global oil market. Using comprehensive data on different types of crude oil, and a two-country general equilibrium model with heterogenous oil and refined products, we show that the shale boom boosted U.S. real GDP by 1 percent and improved the oil trade balance as a share of GDP by more than 1 percentage points from 2010 to 2015. The boom led to a decline in oil and fuel prices, and a dramatic fall in U.S. light oil imports. In addition, we find that the crude oil export ban, which was in place during a large part of this boom, was a binding constraint, and would likely have remained a binding constraint thereafter had the policy not been removed at the end of 2015.
Download paper, RWP 17-10, September 2017; Updated December 2018
JEL Classification: F41, Q33, Q38, Q43
- Çakır Melek, Nida, Michael Plante, and Mine K. Yücel. 2017. “Resource Booms and the Macroeconomy: The Case of U.S. Shale Oil.” Federal Reserve Bank of Kansas City, Research Working Paper 17-10, September. Available at https://doi.org/10.18651/RWP2017-10