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Implications of recent U.S. energy trends for trade forecasts

Author

Listed:
  • Craig S. Hakkio
  • Jun Nie

Abstract

The development of hydraulic fracturing and horizontal drilling has brought significant structural change to the energy sector, increasing energy production and decreasing net energy imports. Future changes in energy policy or technology could have even larger effects on energy exports and thus overall exports. As a result, distinguishing energy from non-energy components of trade becomes important for forecasts in both the near and longer term. Craig S. Hakkio and Jun Nie introduce models separating energy from the non-energy components of trade to examine how changes in energy production affect trade forecasts. Results from the models suggest U.S. energy exports will increase in 2014 and 2015 while non-energy exports decline, reducing the current aggregate real trade deficit by about 14 percent.

Suggested Citation

  • Craig S. Hakkio & Jun Nie, 2014. "Implications of recent U.S. energy trends for trade forecasts," Economic Review, Federal Reserve Bank of Kansas City, issue Q IV, pages 29-51.
    • Handle: RePEc:fip:fedker:00020
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    File URL: https://www.kansascityfed.org/documents/928/2014-Implications%20of%20Recent%20U.S.%20Energy%20Trends%20for%20Trade%20Forecasts.pdf
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    References listed on IDEAS

    as
    1. Daniel F. Waggoner & Tao Zha, 1999. "Conditional Forecasts In Dynamic Multivariate Models," The Review of Economics and Statistics, MIT Press, vol. 81(4), pages 639-651, November.
    2. Negro, Marco Del & Schorfheide, Frank, 2013. "DSGE Model-Based Forecasting," Handbook of Economic Forecasting, in: G. Elliott & C. Granger & A. Timmermann (ed.), Handbook of Economic Forecasting, edition 1, volume 2, chapter 0, pages 57-140, Elsevier.
    3. Jason Brown, 2014. "Production of natural gas from shale in local economies: a resource blessing or curse?," Economic Review, Federal Reserve Bank of Kansas City, issue Q I, pages 1-29.
    4. Todd E. Clark & Michael W. McCracken, 2014. "Evaluating Conditional Forecasts from Vector Autoregressions," Working Papers 2014-25, Federal Reserve Bank of St. Louis.
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    Cited by:

    1. Dimitar Zlatinov, 2018. "A Modelling Approach for Forecasting Net Exports of Electricity from Bulgaria," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 5, pages 147-153.
    2. Dimitar Zlatinov & Nedko Kosev & Stoyan Shalamanov, 2022. "Regional Electricity Trade in South East Europe – Findings from a Panel Structural Gravity Model," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 8, pages 3-18.

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    Keywords

    International trade; Energy production;

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