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The Texas construction sector: the tail that wagged the dog

Author

Listed:
  • D'Ann M. Petersen
  • Keith R. Phillips
  • Mine K. Yücel

Abstract

The boom-to-bust days of the Texas construction industry will linger in people's memory for many years. D'Ann Petersen, Keith Phillips, and Mine Yucel examine the factors that led to the rise and fall of the Texas construction industry and determine the role the industry played in the state's volatile economy during the 1970s and 1980s. ; Petersen, Phillips, and Yucel employ an econometric model to analyze the roles residential and nonresidential construction played in the state's economic fluctuations from 1976 through 1990. The authors find that, although large swings in oil prices were the greatest source of economic instability in the Texas economy, the construction sector also played an important and independent role in the changing fortunes of the state. The authors' results show that the homebuilding sector, in particular, had a large impact on the Texas economy. In addition, the authors find that the state's economy needs several years to adjust to shocks in the construction industry. Consequently, the current expansion in residential construction is likely to have positive economic effects in the years ahead.

Suggested Citation

  • D'Ann M. Petersen & Keith R. Phillips & Mine K. Yücel, 1994. "The Texas construction sector: the tail that wagged the dog," Economic and Financial Policy Review, Federal Reserve Bank of Dallas, issue Q II, pages 23-33.
    • Handle: RePEc:fip:fedder:y:1994:i:qii:p:23-33
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    References listed on IDEAS

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    Cited by:

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    2. Mohd Shahidan Shaari & Tan Lee Pei & Hafizah Abdul Rahim, 2013. "Effects of Oil Price Shocks on the Economic Sectors in Malaysia," International Journal of Energy Economics and Policy, Econjournals, vol. 3(4), pages 360-366.
    3. Quintero Otero, Jorge David, 2020. "Not all sectors are alike: Differential impacts of shocks in oil prices on the sectors of the Colombian economy," Energy Economics, Elsevier, vol. 86(C).

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    Keywords

    Texas; Construction industry;

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