Aggregate impacts of recent U.S. natural gas trends

Arora, Vipin (2013): Aggregate impacts of recent U.S. natural gas trends.

Abstract

Predictions about the macroeconomic impacts of recent U.S. natural gas trends vary widely. I re-evaluate the possible effects on U.S. economic activity using a standard general equilibrium model. Within this framework I show that increases in natural gas supply result in small-to-moderate economic gains, even with unemployment or under-utilized capital. Subsequent rises in economy-wide productivity are the key to magnifying the economic impacts of greater natural gas supply and resources. The 1995-2000 period, where U.S. productivity growth was driven by information technology, is a good starting point for comparing how American productivity may evolve because of natural gas.

• Item Type: MPRA Paper
• Language: English
• Keywords: Natural gas; general equilibrium; unemployment; variable capacity; shale; productivity
• Subjects: E - Macroeconomics and Monetary Economics > E2 - Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy > E27 - Forecasting and Simulation: Models and Applications; E - Macroeconomics and Monetary Economics > E1 - General Aggregative Models > E17 - Forecasting and Simulation: Models and Applications; D - Microeconomics > D2 - Production and Organizations > D24 - Production ; Cost ; Capital ; Capital, Total Factor, and Multifactor Productivity ; Capacity; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q4 - Energy > Q43 - Energy and the Macroeconomy

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