The Potential Macroeconomic Impact of the Unconventional Oil and Gas Boom in the United States

Benjamin Hunt, Dirk Muir and Martin Sommer

No 2015/092, IMF Working Papers from International Monetary Fund

Abstract: This paper uses two of the IMF's structural macroeconomic models to estimate the potential global impact of the boom in unconventional oil and natural gas in the United States. The results suggest that the impact on the level of U.S. real GDP over roughly the next decade could be significant, but modest, ranging between 1 and 1½ percent. Further, while the impact on the U.S. energy trade balance will be large, most results suggest that its impact on the overall U.S. current account will be negligible. The impact outside of the United States will be modestly positive on average, but most countries dependent on energy exports will be affected adversely.

Keywords: WP; price; GIMF; trade balance; supply and demand; price differential; business cycle; energy consumption; energy prices; general equilibrium models; macroeconomic interdependence; monetary policy; oil shocks; policy; substitution effect; red line GIMF result; finite-planning-horizon household; price of energy; blue line GEM result; medium-term equilibrium; oil price drop; natural gas price; income effect; price movement; price elasticity of supply; Foreign assets; Natural gas sector; Current account; Oil; Global (search for similar items in EconPapers)
Pages: 25
Date: 2015-05-01
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Citations: View citations in EconPapers (2)

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