Energy prices and state economic performance

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.