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

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

No 2016.19, Working Papers from FAERE - French Association of Environmental and Resource Economists

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.

Keywords: Manufacturing; shale gas; energy prices; panel data (search for similar items in EconPapers)
JEL-codes: C23 Q43 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2016-06
New Economics Papers: this item is included in nep-ene
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Citations: View citations in EconPapers (1)

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http://faere.fr/pub/WorkingPapers/Kirat_FAERE_WP2016.19.pdf First version, 2016 (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:fae:wpaper:2016.19

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