On the Comparative Advantage of U.S. Manufacturing: Evidence from the Shale Gas Revolution

Rabah Arezki, Thiemo Fetzer and Frank Pisch

No 167, OxCarre Working Papers from Oxford Centre for the Analysis of Resource Rich Economies, University of Oxford

Abstract: This paper provides novel empirical evidence of the effects of a plausibly exogenous change in relative factor prices on United States manufacturing production and trade. The shale gas revolution has led to (very) large and persistent differences in the price of natural gas between the United States and the rest of the world reflecting differences in endowment of difficult to trade natural gas. Guided by economic theory, empirical tests on output, factor reallocation and international trade are conducted. Results show that U.S. manufacturing exports have grown by about 10 percent on account of their energy intensity since the onset of the shale revolution. We also document that the U.S. shale revolution is operating both at the intensive and extensive margins.

Keywords: manufacturing; exports; energy prices; shale gas (search for similar items in EconPapers)
JEL-codes: L71 N52 O13 Q33 R11 (search for similar items in EconPapers)
Date: 2016-01-25
New Economics Papers: this item is included in nep-ene and nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Related works:
Journal Article: On the comparative advantage of U.S. manufacturing: Evidence from the shale gas revolution (2017)
Working Paper: On the comparative advantage of U.S. manufacturing: Evidence from the shale gas revolution (2017)
Working Paper: On the comparative advantage of U.S. manufacturing: evidence from the shale gas revolution (2017)
Working Paper: On the Comparative Advantage of U.S. Manufacturing: Evidence from the Shale Gas Revolution (2016)
Working Paper: On the comparative advantage of U.S. manufacturing: evidence from the shale gas revolution (2016)
Working Paper: On the Comparative Advantage of U.S. Manufacturing: Evidence from the Shale Gas Revolution (2016)
Working Paper: On the comparative advantage of U.S. manufacturing:evidence from the shale gas revolution (2016)
Working Paper: On the comparative advantage of U.S. manufacturing:evidence from the shale gas revolution (2016)
Working Paper: On the Comparative Advantage of U.S. Manufacturing: Evidence from the Shale Gas Revolution (2016)
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