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The effects of shale oil production, capital and labour on economic growth in the United States: A maximum likelihood analysis of the resource curse hypothesis

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  • Solarin, Sakiru Adebola

Abstract

We examine the role of shale oil production in national economic growth in the United States for the period 2002Q1 to 2019Q4. Within a Cobb-Douglas production framework, we estimate the impact of increasing shale oil production on GDP and total employment. Adopting a maximum likelihood approach with a breakpoint, we observe the positive impact of shale oil production on economic growth is bigger in the post-recession period than in the pre-recession and during recession period. The results further show that shale oil production has a positive impact on the employment level but the impact of shale oil production on gross domestic product (GDP) is greater than the impact of shale oil production on employment level. The implication of the results is that shale oil development is yet to indicate tendency of resource curse in the United States.

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  • Solarin, Sakiru Adebola, 2020. "The effects of shale oil production, capital and labour on economic growth in the United States: A maximum likelihood analysis of the resource curse hypothesis," Resources Policy, Elsevier, vol. 68(C).
    • Handle: RePEc:eee:jrpoli:v:68:y:2020:i:c:s0301420719309249
    DOI: 10.1016/j.resourpol.2020.101799
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    More about this item

    Keywords

    Resource curse; Shale oil; Economic growth; Maximum likelihood approach;
    All these keywords.

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O51 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - U.S.; Canada

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