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The actual impact of shale gas revolution on the U.S.manufacturing sector

Author

Listed:
  • Yassine Kirat

    (Université Paris 1 Panthéon-Sorbonne, Paris School of Economics)

Abstract

This paper investigates the comparative advantage allowed by the U.S shale gas revolution to the U.S manufacturing sector. It estimates the response of various economic variables related to the U.S manufacturing sector using dynamic panel data models that allow each sector's response to vary with its energy intensity. We show that the decline in natural gas prices in the US relative to natural gas prices in Europe has led to an increase in industrial activity by nearly 2%. We show also that exports increased by 0,86% and imports decreased by 1,11%. Moreover, we find an empirical evidence that the relationship between natural gas prices and imports or exports has experienced structural breaks. Overall, we conclude that the shale gas revolution expended some industries but it does not have a strong effect on the manufacturing sector as a whole.

Suggested Citation

  • Yassine Kirat, 2016. "The actual impact of shale gas revolution on the U.S.manufacturing sector," Working Papers 2016.19, FAERE - French Association of Environmental and Resource Economists.
    • Handle: RePEc:fae:wpaper:2016.19
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    File URL: http://faere.fr/pub/WorkingPapers/Kirat_FAERE_WP2016.19.pdf
    File Function: First version, 2016
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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.

    More about this item

    Keywords

    Manufacturing; shale gas; energy prices; panel data;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

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