Natural Gas and the US Economy: Some Preliminary Rules of Thumb

Arora, Vipin (2018): Natural Gas and the US Economy: Some Preliminary Rules of Thumb.

Abstract

I estimate the response of real US GDP to changes in the natural gas price. A 10% increase in the natural gas price due to an unexpected fall in supply leads to a 0.15% decrease in GDP when using data after 2005. I also find that price increases driven by export demand became a net positive for GDP between 2006 and 2017—an interesting result that requires further research. Finally, the response of GDP to an increase in natural gas production is small and positive since 2005.

• Item Type: MPRA Paper
• Language: English
• Keywords: economic activity; natural gas; shale; rules of thumb
• Subjects: C - Mathematical and Quantitative Methods > C1 - Econometric and Statistical Methods and Methodology: General > C11 - Bayesian Analysis: General; C - Mathematical and Quantitative Methods > C3 - Multiple or Simultaneous Equation Models ; Multiple Variables > C32 - Time-Series Models ; Dynamic Quantile Regressions ; Dynamic Treatment Effect Models ; Diffusion Processes ; State Space Models; E - Macroeconomics and Monetary Economics > E3 - Prices, Business Fluctuations, and Cycles > E37 - Forecasting and Simulation: Models and Applications; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q4 - Energy > Q43 - Energy and the Macroeconomy

References

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