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Aggregate impacts of recent US natural gas trends

Author

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  • Arora Vipin

    (US Energy Information Administration, 1000 Independence Ave S.W. Washington District of Columbia 20585, USA)

Abstract

Predictions about the macroeconomic impacts of recent US natural gas trends vary widely. I re-evaluate the possible effects on US 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. I also find that the macroeconomic effects of greater domestic oil production differ from those of natural gas.

Suggested Citation

  • Arora Vipin, 2014. "Aggregate impacts of recent US natural gas trends," The B.E. Journal of Macroeconomics, De Gruyter, vol. 14(1), pages 419-443, January.
    • Handle: RePEc:bpj:bejmac:v:14:y:2014:i:1:p:25:n:15
    DOI: 10.1515/bejm-2013-0109
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    References listed on IDEAS

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    Cited by:

    1. Arora, Vipin, 2018. "Natural Gas and the US Economy: Some Preliminary Rules of Thumb," MPRA Paper 87279, University Library of Munich, Germany.
    2. Arora, Vipin, 2017. "Shale and the US Economy: Three Counterfactuals," MPRA Paper 79672, University Library of Munich, Germany.
    3. Vipin Arora and Jozef Lieskovsky, 2014. "Natural Gas and U.S. Economic Activity," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3).

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    More about this item

    Keywords

    general equilibrium; natural gas; productivity; shale; unemployment; variable capacity;
    All these keywords.

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • E17 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Forecasting and Simulation: Models and Applications
    • E27 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Forecasting and Simulation: Models and Applications
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

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