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On the comparative advantage of U.S. manufacturing:evidence from the shale gas revolution

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  • Arezki, Rabah
  • Fetzer, Thiemo

Abstract

This paper provides the first empirical evidence of the newly found comparative advantage of the United States manufacturing sector following the so-called shale gas revolution. The revolution has led to (very) large and persistent differences in the price of natural gas between the United States and the rest of the world owing to the physics of natural gas. Results show that U.S. manufacturing exports have grown by about 6 percent on account of their energy intensity since the onset of the shale revolution. We also document that the U.S. shale revolution is operating both at the intensive and extensive margins.

Suggested Citation

  • Arezki, Rabah & Fetzer, Thiemo, 2016. "On the comparative advantage of U.S. manufacturing:evidence from the shale gas revolution," LSE Research Online Documents on Economics 66410, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:66410
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    Cited by:

    1. repec:eee:energy:v:160:y:2018:i:c:p:378-387 is not listed on IDEAS
    2. Richard Jaimes & Reyer Gerlagh, 2017. "Resource-Richness and Economic Growth in Contemporary U.S," CESifo Working Paper Series 6778, CESifo Group Munich.
    3. Edward J Manderson & Richard Kneller, 2019. "Energy endowments and the location of manufacturing firms," The School of Economics Discussion Paper Series 1907, Economics, The University of Manchester.
    4. Hanwei Huang & Jiandong Ju & Vivian Z. Yue, 2017. "Structural Adjustments and International Trade: Theory and Evidence from China," CEP Discussion Papers dp1508, Centre for Economic Performance, LSE.
    5. repec:eee:eneeco:v:75:y:2018:i:c:p:410-422 is not listed on IDEAS
    6. James Cust & Torfinn Harding & Pierre-Louis Vezina, 2017. "Dutch Disease Resistance: Evidence from Indonesian Firms," OxCarre Working Papers 192, Oxford Centre for the Analysis of Resource Rich Economies, University of Oxford.

    More about this item

    Keywords

    manufacturing; exports; energy prices; shale gas;

    JEL classification:

    • J1 - Labor and Demographic Economics - - Demographic Economics

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