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Resource Booms and the Macroeconomy: The Case of U.S. Shale Oil

Author

Listed:
  • Nida Cakir Melek

    (Federal Reserve Bank of Kansas City)

  • Michael Plante

    (Federal Reserve Bank of Dallas)

  • Mine Yucel

    (Federal Reserve Bank of Dallas)

Abstract

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 a little more than 1 percent and improved the oil trade balance as a share of GDP by about 1 percentage point 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, a policy in effect until the end of 2015, was a binding constraint, and would likely have remained a binding constraint thereafter had the policy not been removed. (Copyright: Elsevier)

Suggested Citation

  • Nida Cakir Melek & Michael Plante & Mine Yucel, 2021. "Resource Booms and the Macroeconomy: The Case of U.S. Shale Oil," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 42, pages 307-332, October.
    • Handle: RePEc:red:issued:19-233
    DOI: 10.1016/j.red.2020.11.006
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    2. Peter Öhlinger & Michael Irlacher & Jochen Güntner, 2024. "Not all oil types are alike in trade substitution," Nature Communications, Nature, vol. 15(1), pages 1-12, December.
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    4. Bei Zhang & Xiaoqing Ai & Xingming Fang & Shi Chen, 2022. "The Transmission Mechanisms and Impacts of Oil Price Fluctuations: Evidence from DSGE Model," Energies, MDPI, vol. 15(16), pages 1-20, August.
    5. Dohyoung Kwon, 2024. "Changes in the effects of oil price shocks on US industrial production," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 29(2), pages 2515-2526, April.

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    More about this item

    Keywords

    DSGE; Tardel Oil; Shale; Fuel prices; Export ban;
    All these keywords.

    JEL classification:

    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
    • Q33 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Resource Booms (Dutch Disease)
    • Q38 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Government Policy (includes OPEC Policy)
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

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