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Energy prices and state economic performance

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Abstract

Changes in energy prices have had sizable but differing effects on economic activity across the United States. The composition of each state's economy largely determines how its employment responds to changes in energy prices. In this article, Stephen Brown and Mine Yucel use simulations based on input-output analysis to assess the long-term consequences of changing oil prices on employment in each state in 1982, 1992, and 2000. Brown and Yucel find that because state economies are becoming more similar in their composition, the variation across states in the response to changing oil prices is narrowing. The authors' findings suggest that the grounds for regional divisions in the debate over national energy policy have lessened since the early 1980s and will continue to do so throughout the remainder of the 1990s.

Suggested Citation

  • Stephen P. A. Brown & Mine K. Yücel, 1995. "Energy prices and state economic performance," Economic and Financial Policy Review, Federal Reserve Bank of Dallas, issue Q II, pages 13-23.
    • Handle: RePEc:fip:fedder:y:1995:i:qii:p:13-23
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    References listed on IDEAS

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    1. S. P. A. Brown & John K. Hill, 1988. "Lower Oil Prices And State Employment," Contemporary Economic Policy, Western Economic Association International, vol. 6(3), pages 60-68, July.
    2. Robert J. Barro & Xavier Sala-i-Martin, 1991. "Convergence across States and Regions," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 22(1), pages 107-182.
    3. Barro, Robert J & Sala-i-Martin, Xavier, 1992. "Convergence," Journal of Political Economy, University of Chicago Press, vol. 100(2), pages 223-251, April.
    4. Stephen P. A. Brown & Mine K. Yücel, 2000. "Oil prices and the economy," Southwest Economy, Federal Reserve Bank of Dallas, issue Jul, pages 1-6.
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    Cited by:

    1. William C. Gruben, 2000. "US-China trade relations: the best of both worlds," Southwest Economy, Federal Reserve Bank of Dallas, issue Jul, pages 1-10.
    2. Stephen P. A. Brown & Hillard G. Huntington, 2003. "Terms of trade and OECD policies to mitigate global climate change," Economic and Financial Policy Review, Federal Reserve Bank of Dallas.
    3. Cletus C. Coughlin & Patricia S. Pollard, 2000. "State exports and the Asian crisis," Review, Federal Reserve Bank of St. Louis, vol. 82(Jan), pages 3-14.
    4. Arlan Brucal & Michael J. Roberts, 2018. "Not All Regions Are Alike: Evaluating the Effect of Oil Price Shocks on Local and Aggregate Economies," Working Papers 201807, University of Hawaii at Manoa, Department of Economics.
    5. Kristie M. Engemann & Michael T. Owyang & Howard J. Wall, 2014. "Where Is An Oil Shock?," Journal of Regional Science, Wiley Blackwell, vol. 54(2), pages 169-185, March.
    6. Sexton, Steven & Eyer, Jonathan, 2016. "Leveling the playing field of transportation fuels: Accounting for indirect emissions of natural gas," Energy Policy, Elsevier, vol. 95(C), pages 21-31.
    7. Brown, Stephen P.A., 2018. "New estimates of the security costs of U.S. oil consumption," Energy Policy, Elsevier, vol. 113(C), pages 171-192.
    8. Thomas H. Klier & Richard H. Mattoon & William A. Testa, 1997. "Reversal of fortune: understanding the Midwest recovery," Economic Perspectives, Federal Reserve Bank of Chicago, vol. 21(Jul), pages 2-17.
    9. John Thompson & Mark A. Wynne, 2000. "The new paradigm in Europe: is Goldilocks going global?," Southwest Economy, Federal Reserve Bank of Dallas, issue Sep, pages 1-6.
    10. W. Michael Cox & Jason L. Saving, 2000. "Some pleasant economic side effects," Southwest Economy, Federal Reserve Bank of Dallas, issue Jul, pages 7-9.
    11. Thomas Garrett & Gary Wagner & David Wheelock, 2007. "Regional disparities in the spatial correlation of state income growth, 1977–2002," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 41(3), pages 601-618, September.
    12. Brown, Stephen P. A. & Yucel, Mine K., 2002. "Energy prices and aggregate economic activity: an interpretative survey," The Quarterly Review of Economics and Finance, Elsevier, vol. 42(2), pages 193-208.
    13. Stephen P. A. Brown, 1998. "Global warming policy: some economic implications," Economic and Financial Policy Review, Federal Reserve Bank of Dallas, issue Q IV, pages 26-35.
    14. Shekar Shetty & Zahid Iqbal & Mansour Alshamali, 2013. "Energy Price Shocks and Economic Activity in Texas Cities," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 41(4), pages 371-383, December.

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    Keywords

    Power resources - Prices; state finances;

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