learning to believe in sunspots a number of authors have shown that competitive economies may possess sunspot equilibria that is rational expectations equilibria in which purely extrinsic uncertainty affects equilibrium prices and allocations 2 such results demonstrate that it does not require a lack of faith in the rationality of market participants to believe that competitive markets may be subject to purely speculative fluctuations driven solely by expectations 3 the mere existence of sunspot equilibria as solutions to a system of marketclearing conditions however might not be judged sufficient to indicate that competitive markets with rational participants could ever be subject to speculative instability the sunspot equilibria represent states of affairs in which agents act differently in the case of different realizations of the sunspot variable and it is rational for each agent to do so but it might be thought unlikely that the beliefs of all the participants in the market could ever come to be coordinated so as to bring about an equilibrium of that kind it is rational to believe that sunspots convey information about future states of affairs once the economy is in a sunspot equilibrium but why would rational agents ever begin to believe in such a thing so as to create the conditions under which the belief is rational in order to address such a question one must go beyond the mere statement of the conditions for equilibrium and discussion of what states of affairs satisfy them one must specify an explicit dynamic process according to which the beliefs of agents adjust when out of equilibrium any exercise of this kind is necessarily unsatisfactory as there is no univocal meaning for the postulate of rational behavior outside of an equilibrium it may well be the case that

the housing market impacts of shale gas development using data from pennsylvania and an array of empirical techniques to control for confounding factors we recover hedonic estimates of property value impacts from nearby shale gas development that vary with water source well productivity and visibility results indicate large negative impacts on nearby groundwater dependent homes while piped water dependent homes exhibit smaller positive impacts suggesting benefits from lease payments results have implications for the debate over regulation of shale gas development jel l71 q35 q53 r31 technological improvements in the extraction of oil and natural gas from unconventional sources have transformed communities and landscapes and brought debate and controversy in the policy arena shale gas plays underlying the populated northeastern united states were thought to be uneconomical less than ten years ago but now contribute a major share of us gas supply 1 natural gas has been hailed as a bridge to energy independence and a clean future because of its domestic sourcing and compared with coal and petroleum derivatives its smaller carbon footprint and reduced emissions of other pollutants e g particulates sulfur dioxide car

imperfect competition and the keynesian cross abstract this paper presents a simple general equilibrium model in which the only non walrasian feature is imperfect competition in the goods market the model is shown to exhibit various keynesian characteristics in particular as competition in the goods market becomes less perfect the fiscal policy multipliers approach the values implied by the textbook keynesian cross

indeterminacy of stationary equilibrium in stochastic overlapping generations models abstract in this paper we consider the local uniqueness properties of stationary rational expectations equilibria ree in a stochastic overlapping generations olg model it is known that in non stochastic olg models steady state equilibria are locally isolated although there may exist indeterminate non stationary perfect foresight equilibria we show by construction that in the stochastic model even stationary equilibrium may be indeterminate we also show that this result is robust in the sense that there exists a non empty open set of economies for which the result is true

the long term consequences of resource based specialisation using geological variation in oil abundance in the southern us i examine the long term effects of resource based specialisation through economic channels in 1890 oil abundant counties were similar to other nearby counties but after oil was discovered they began to specialise in its production from 1940 90 oil abundance increased local employment per square kilometre especially in mining but also in manufacturing oil abundant counties had higher population growth higher per capita income and better infrastructure 2010 the author s the economic journal 2010 royal economic society

the big push natural resource booms and growth a simple application of big push reasoning suggests that natural resource booms can be important catalysts for development in poorer countries in this paper we present evidence from seven latin american countries that natural resource booms are sometimes accompa nied by declining per capita gdp we present a model with natural resources increasing returns in the spirit of big push models and expectations to clarify some of the reasons this may happen q 1999 elsevier science b v all rights reserved

can the us shale revolution be duplicated in continental europe an economic analysis of european shale gas resources abstract over the past decade the rapid increase in shale gas and shale oil production in the united states has profoundly changed energy markets in north america and has led to a significant decrease in american natural gas prices the possible existence of large shale deposits in continental europe mainly in france denmark the netherlands and germany has fostered speculation on whether the u s shale revolution could be duplicated in europe however a number of uncertainties notably geological technological regulatory and relating to public acceptance make this possibility unclear we present a techno economic model of shale gas production amenable to direct estimation on historical production data to analyze the main determinants of the profitability of shale wells and plays we contribute an in depth analysis of an extensive production dataset covering 40 000 wells and accounting for nearly 90 of shale gas production in the six main plays of the continental united states from 2004 to 2014 we combine this analysis with a discussion of the main differences between the american and european contexts to calibrate our model and conduct monte carlo simulations this enables us to estimate the distribution of breakeven prices for shale gas extraction in continental europe we find a median gross breakeven price before taxes and royalties of 10 1 per mmbtu this would make extraction unprofitable in europe in the current natural gas price environment with

comparative statics in a simple class of strategic market games this paper investigates the effects of entry in two sided markets where buyers and sellers act strategically applying new tools from supermodular optimization games sufficient conditions for different comparative statics results are obtained while normality of one good is sufficient for the equilibrium price to be increasing in the number of buyers normality of both goods is required for equilibrium bids and sellers equilibrium utilities to be increasing in the number of buyers when the economy is replicated normality of both goods and gross substitutes guarantee that the equilibrium of the strategic market game converges monotonically in quantities to the competitive equilibrium simple counter examples are provided to settle other potential conjectures of interest c 2007 elsevier inc all rights reserved

will the locals benefit the effect of wind power investments on rural wages abstract an important and poorly understood question when communities consider wind power investments is whether the local population will benefit financially i examine the effect of wind power investment on wages in rural counties in the us i combine quarterly panel data on wages with data on all wind power plant investments larger than 1 megawatt mw using a bayesian multilevel model estimated by mcmc i estimate a significant positive effect with a magnitude consistent with a 2 permanent increase in wages following an investment in a large wind farm of 400 mw however this effect has large geographic and socioeconomic variation counties with low employment tend to see little impact on wages from wind power potentially because slack in the labor market prevents wages from rising from a policy perspective these results are most relevant for local regulators and planners who seek to balance the benefits and costs of wind farms to the community this research indicates that wind farms can provide on average a modest boost to local wages with some areas seeing an out sized effect

trade fragmentation and coordination in strategic market games abstract this paper analyzes the incentives to trade and the validity of the law of one price in three strategic market games with multiple trading posts in bilateral oligopolies where traders have corner endowments in one commodity all agents participate in all the markets the law of one price holds in bilateral oligopolies and in the buy or sell market game where equilibrium strategies are locally unique when traders can simultaneously buy and sell on every market the law of one price fails and the set of equilibrium prices generically has the same dimension as the number of active markets journal of economic literature classification numbers d43 d51

dynamic production teams with strategic behavior abstract we analyze if intergenerational teams reveal workers productivities some uncertainty on agents productivities persists when i each agent must work independently or ii technological shocks are agent specific in compulsory teams however when technological shocks are team specific in compulsory teams each worker s productivity is revealed when agents choose to work independently or in teams that problem falls in the class of dynamic games elective teams are preferred by high productivity young workers when the technological shocks are agent specific and maximize the expected utility of a young worker when shocks are team specific

representative agent meets class structure imperfect competition and the balanced budget multiplier recently new keynesian economists nke have been concerned with the effect of imperfect competition on the sign and size of the balanced budget fiscal multiplier this literature all came up with models based on a profit income relationship in which imperfect competition increases the tax financed fiscal multiplier accordingly the higher the exercise of market power by firms the greater the effectiveness of fiscal policy in this paper we argue that the new keynesian results are very sensitive to a heroic simplification on which they rest the representative agent we show that in terms of the budget balanced multiplier a kaleckian approach where class structure matters offers a richer set of results moreover we develop a simple short run rational agent optimisation model of the type used by nke and introduce class structure into it we demonstrate in support of the kaleckian approach that even in a general equilibrium optimising framework the balanced budget multiplier is strictly decreasing in the degree of monopoly copyright 2006 oxford university press

social costs from proximity to hydraulic fracturing in new york state the study reports data from an economic choice experiment to determine the likely welfare impacts of hydraulic fracturing in this case using natural gas extracted by hydraulic fracturing for household electricity data were collected from an internet survey of 515 residents of new york state the welfare analysis indicated that on average households incur a welfare loss from in state hydraulic fracturing as the source of their electricity the evidence suggests that households in shale counties bear more costs from hf electricity than households out of shale counties the average welfare loss is substantive estimated at 40 46 of average household electric bills in shale counties and 16 20 of bills in counties without shale the evidence also suggests that relative proximity to hf well sites also increases cost borne by households

fracking and environmental in justice in a texas city abstract shale gas development sgd via horizontal drilling and fracking is touted for economic benefits and spurned for health and environmental impacts despite sgd s socioecological salience few peer reviewed empirical studies document the distribution of positive and negative effects the city of denton texas has 280 active gas wells and over a decade of sgd here we use an environmental justice framework to analyze the distribution of sgd s costs and benefits within denton using data on mineral property values from 2002 to 2013 and gas well locations we ask who owns denton s mineral rights i e the greatest financial beneficiaries and how does this ownership pattern relate to who lives near gas wells i e those who shoulder the nuisances and health impacts our results show that denton s mineral wealth is widely distributed around the u s residents own 1 of the total value extracted and the city government is a large financial beneficiary in addition to distributional inequities our analysis demonstrates that split estate doctrine legal deference to mineral owners and sgd s uniqueness in urban centers create disparities in municipal sgd decision making processes the environmental justice issues associated with fracking in denton also provide one possible explanation for residents november 2014 vote to ban hydraulic fracturing

an economic impact report of shale gas extraction in pennsylvania with stricter assumptions abstract during the onset of shale gas development a variety of economic impact studies were released through the gray literature without formal peer review in a review of six such impact reports kinnaman 2011 speculates about several major issues worth scrutiny arising with analysis using input output models his central critique focuses on the assumptions of how industry spending is represented and how leasing and royalty dollars are spent in this study we use detailed county records and results from a survey to directly address these assumptions and compare our results to the findings in an economic impact study of marcellus shale development in pennsylvania which kinnaman critiqued our results which are only about 52 of the prior study confirm his supposition that some ex ante studies use unrealistic assumptions which lead to gross overestimates of the impacts

the impact of natural resources survey of recent quantitative evidence the cross country empirical evidence for the natural resource curse is ample but unfortunately fraught with econometric difficulties a recent wave of studies on measuring the impact of natural resource windfalls on the economy exploits novel datasets such as giant oil discoveries to identify effects of windfalls uses natural experiments and within country econometric analysis and estimates local impacts these studies offer more hope in the search of quantitative evidence

resource richness and economic growth in contemporary u s abstract we study the effects of energy innovation and policy on income growth between 1997 and 2014 us corn soybean and cotton production almost fully converted to genetically modified crops starting around 2007 improved tight oil and shale gas technologies turned the declining us fossil fuel production into a booming industry we study the effects of these two resource technology revolutions on us state income we find that the shale revolution increased income in states abundant in oil and gas resources states dependent on agricultural production also saw an increase in income which we however attribute not only to the gm innovation but to a demand increase brought by the energy policy act of 2005

long term effects of income specialization in oil and gas extraction the u s west 1980 2011 abstract the purpose of the study is to evaluate the relationships between oil and natural gas specialization and socioeconomic well being during the period 1980 to 2011 in a large sample of counties within the six major oil and gas producing states in the interior u s west colorado montana new mexico north dakota utah and wyoming the effects of participation in the early 1980s oil and gas boom and long term specialization were considered as possible drivers of socioeconomic outcomes generalized estimating equations were used to regress 11 measures of economic growth and quality of life on oil and gas specialization while accounting for various confounding factors including degree of access to markets initial socioeconomic conditions in 1980 and dependence on other economic sectors long term oil and gas specialization is observed to have negative effects on change in per capita income crime rate and education rate participation in the early 1980s boom was positively associated with change in per capita income however the positive effect decreases the longer counties remain specialized in oil and gas our findings contribute to a broader public dialogue about the consequences of resource specialization involving oil and natural gas and call into question the assumption that long term oil and gas development confers economic advantages upon host communities

employment impacts of upstream oil and gas investment in the united states abstract we use dynamic panel methods at the state level to understand how the increase in exploration and production of oil and natural gas since the mid 2000s has impacted employment we find robust statistical support for the hypothesis that changes in drilling do in fact have an economically meaningful and positive impact on employment the strongest impact is contemporaneous though months later in the year also experience statistically and economically meaningful growth once dynamic effects are accounted for we estimate that an additional rig count results in the creation of 31 jobs immediately and 315 jobs in the long run robustness checks suggest that these multipliers could be even bigger our results imply that the national impact of upstream investment remains small perhaps due to the sector s small size and inter state migration

who wins in an energy boom evidence from wage rates and housing this article presents evidence on the distributional effects of energy extraction by examining the effect of the recent u s energy boom on wage rates and housing the boom increased local wage rates in almost every major occupational category the increase occurred regardless of whether the occupation experienced a corresponding change in employment suggesting a tighter labor market that benefited local workers wage rates also increased substantially across the entire wage rate distribution although the percentage increase was slightly higher at the bottom of the distribution than at the top local housing values and rental prices both increased thereby benefiting landowners for renters the increase in prices was completely offset by a contemporaneous increase in income the results suggest that bans on drilling have negative monetary consequences for a large share of local residents jel j23 q33 r31

endogenous strategic business cycles this paper examines an overlapping generations version of the shapley shubik market game we show existence of equilibria for the simple one commodity model and analyze the dynamics of the equilibrium trajectories generated in the model because of the non linearities generated by strategic interaction of agents in the model we find that complex and chaotic equilibrium dynamics are possible in this model for a much broader range of preferences than those for which grandmont econometrica53 no 5 1995 995 1045 found complicated dynamics in the perfectly competitive version of this model these results then provide an alternative to the usual technology based explanation for the historical fact that business cycles became an important economic phenomenon only with the onset of industrialization journal of economic literatureclassification numbers c72 c73 d51 l16

oil prices and rural migration the dutch disease goes south abstract we construct a two period general equilibrium model to evaluate policies affecting agricultural migration and exports the model is applied to mexico for the period 1986 1987 to obtain certain qualitative policy conclusions related to the dutch disease brought about by oil price increases dutch disease phenomena can be brought about both as the result of real exchange rate changes as well as price changes caused by migration out of agriculture in the short run it may be possible to use fiscal policy such as value added subsidies to agriculture to at least partially negate the effects of an oil price increase on agricultural exports jel f31 f41

unconventional energy taxation and interstate welfare an analysis of pennsylvania s severance tax policy abstract natural gas production from unconventional sources has increased over the past decade a significant portion of this increase has come from output in the marcellus region of pennsylvania this output has altered gas markets and repositioned pennsylvania as a major gas exporter it has also put pennsylvania at odds with other states as it is one of a few without a formal severance tax on extractive resources in this paper we combine results from a structural demand model with a two sector trade model to analyze the interstate welfare impacts of pennsylvania s current severance tax proposal our results demonstrate that most of the welfare losses from this proposed policy are likely to be shifted to residents in other states we also demonstrate how fluctuations in gas prices can substantially reduce tax revenue these findings have important implications for both pennsylvania and u s energy policy given the significant rise in energy production from new sources throughout the u s

geographic dispersion of economic shocks evidence from the fracking revolution abstract we track the geographic and temporal propagation of local economic shocks from new oil and gas production generated by hydrofracturing each million dollars of new production produces 80 000 in wage income and 132 000 in royalty and business income within a county within 100 miles one million dollars of new production generates 257 000 in wages and 286 000 in royalty and business income roughly two thirds of the wage income increase persists for two years assuming no general equilibrium effects new extraction increased aggregate us employment by as many as 640 000 and decreased the unemployment rate by 0 43 during the great recession jel d86 l14 l81 l82

migration flows in commodity cycles assessing the role of migration policies this paper sheds light on the role of immigration policies in shaping immigration flows in responses to labor market changes using data from australia during the 2001 to 2015 commodity cycle as a quasi experiment we find that employer sponsored demand driven immigration varied in line with commodity prices with commodity intensive states witnessing stronger growth rates than remaining states over the resources boom period there is no evidence of any such patterns for points based supply driven immigrants moreover we do not find either employer sponsored or point based migration flows increase in non tradable sector in relative to tradable sector in the triple differences analysis with state industry level data these findings emphasize the importance of employer sponsored immigration in alleviating short term local labor shortages c 2020 elsevier b v all rights reserved

monopolistic competition as a foundation for keynesian macroeconomic models a general equilibrium macroeconomic model based on monopolistic competition is presented the model exhibits a traditional multiplier in the short run but due to free entry the multiplier disappears in the long run by construction all agents are fully rational the keynesian results are a consequence of the assumption of monopolistic competition which creates a divergence between optimal private behavior and optimal social behavior

large market games with demand uncertainty abstract we consider a market game with a continuum of consumers where the measure of each type is stochastic nature selects the set of active consumers who make bids and offers on l 1 spot market trading posts existence of type symmetric nash equilibrium is proven when facing price uncertainty best responses are unique and a nash equilibrium to the sell all game is typically not a nash equilibrium to the original game under plausible circumstances consumers strictly prefer to be on one side of the market

market uncertainty correlated and sunspot equilibria in imperfectly competitive economies first version received june 1988 final version accepted november 1990 eds an imperfectly competitive economy is very prone to market uncertainty including uncertainty about the liquidity or thickness of markets we show in particular that there exist stochastic equilibrium outcomes in nonstochastic market games if and only if the endowments are not pareto optimal we also provide a link between extrinsic uncertainty arising in games e g correlated equilibria and extrinsic uncertainty in market economies e g sunspot equilibria a correlated equilibria to the market game is either a sunspot equilibrium or a non sunspot equilibrium to the related securities games but the converse is not true in general

environmental justice in the oil refinery industry a panel analysis across united states counties abstract environmental injustice due to economic inequality and its correlates and consequences has been a focus for researchers and policy makers alike over many years with much of that research focusing on race as the major determinant of inequality in this paper we extend this literature by focussing on emissions from the oil refinery industry at the community level in particular based on the use of panel data we analyse econometrically how the environmental performance of individual petroleum refineries emissions of benzene and toluene to the atmosphere associates with determinants of economic inequality at the micro level in terms of average per capita income at the level of united states counties as well as average county level unemployment rates the paper finds evidence of environmental injustice as a result of unemployment levels in areas around refineries and to a slightly lesser extent as a result of income inequality it discusses these results in a wider context referring amongst other things to the role of county level community characteristics and the potential for private firms to substitute for the intervention of public institutions if these are lacking

monopolistic competition business cycles and the composition of aggregate demand abstract we develop a dynamic general equilibrium model with monopolistically competitive firms and endogenous markups and show the possibility of equilibria with persistent fluctuations driven by self fulfilling revisions of expectations for some parameter values such fluctuations are characterized by time series properties similar to those observed in u s postwar business cycles in contrast with the existing literature our results do not rely on the presence of increasing returns or nominal rigidities a key ingredient of the model is the link between markups and the composition of aggregate demand some econometric evidence on the latter is also reported journal of economic literature classification number d43 d58 e32

linking the price of agricultural land to use values and amenities the recent appreciation in agricultural land values across the united states has raised a number of important questions for farmers farmland owners lenders and policy makers while traditional economic theory suggests that farmland values are determined by the discounted stream of expected returns previous research has shown that agricultural land values are actually driven by a complex set of factors this study leverages the unique characteristics of a national land based usda survey on farmland values and cash rents to estimate broad national level determinants of the market value of cropland and pastureland our results support past research findings that indicate farmland values are only partially explained by agricultural returns we find that multiple nonagricultural attributes of farmland also contribute to the market value

indeterminacy and increasing returns abstract we investigate properties of the one sector growth model with increasing returns under two organizational structures capable of reconciling the existence of aggregate increasing returns with competitive behavior by firms the first involves input externalities the second involves monopolistic competition we show for parameters in close accord with recent literature on real business cycles that the model displays an indeterminate steady state that can be exploited to generate a model of business fluctuations driven by self fulfilling beliefs in our first class of models growth is generated by exogenous increases in factor productivity in the second class the marginal product of capital is large enough for endogenous growth journal of economic literature classification numbers e00 e3 o40

i can hear my neighbors fracking the effect of natural gas production on housing values in tarrant county tx abstract in this study we estimate the effect of hydraulically fractured natural gas wells on residential real estate prices we exploit variation in distance to nearby gas wells in home sale prices to estimate this effect in contrast to previous studies we focus on a relatively densely populated area a section of the dallas ft worth arlington urban area using a dataset of 127 556 observations from tarrant county texas over the period 2005 2011 we find robust evidence that increased proximity to a well leads to reduced home sale prices existence of wells within 3500 ft of a property reduces property values by approximately 1 5 3 we demonstrate that the reduction seems to be driven by unconventional rather than conventional wells and that well construction causes an added 1 2 reduction in home value

the economic impact of the coal boom and bust in this paper we examine the impact of the coal boom in the 1970s and the subsequent coal bust in the 1980s on local labour markets in kentucky ohio pennsylvania and west virginia we address two main questions in our analysis how were non mining sectors affected by the shocks to the mining sector how did these effects differ between sectors producing local goods and those producing traded goods we find evidence of modest employment spillovers into sectors with locally traded goods but not into sectors with nationally traded goods

on endogenous competitive business cycles the belief that the long run equilibrium of a competitive monetary economy that does not experience any exogeneous shocks whether originating from the external environment or from policy should be modelled as a state that is stationary or perhaps growing at a constant rate seems to be deeply rooted in the mind of some economists

the economic impact of shale gas extraction a review of existing studies abstract recent advances in drilling technology have allowed for the profitable extraction of natural gas from deep underground shale rock formations several reports sponsored by the gas industry have estimated the economic effects of the shale gas extraction on incomes employment and tax revenues none of these reports has been published in an economics journal and therefore have not been subjected to the peer review process yet these reports may be influential to the formation of public policy this commentary provides written reviews of several studies purporting to estimate the economic impact of gas extraction from shale beds due to questionable assumptions the economic impacts estimated in these reports are very likely overstated

emergent patterns and processes in urban hydrocarbon governance abstract beginning in the 2000s the dallas fort worth metropolitan region became home to the world s largest and longest experiment in urban shale gas production with 25 182 drilling permits issued from 2000 to 2016 in the barnett shale urban hydrocarbon governance centered on establishing statutory setback distances between drilling sites and nearest houses or other protected uses here we analyze qualitative interview data obtained with a rigorous sampling frame to examine processes and outcomes of municipal level hydrocarbon governance we find that early municipal responses 2001 2002 revealed lack of technical expertise to respond to unconventional drilling and production controversial wells which residents considered too close to houses focused governance debates in several municipalities municipal policymakers reported that protecting public health and safety were top priorities in determining setbacks after 2003 policymakers copied ordinance language from neighboring municipalities and established task forces and working groups to reduce political tensions the role of the hydrocarbon industry included frequent claims seeking to exploit the longstanding separation of mineral and property estates which encouraged municipalities to reduce setbacks and lower potential exposure to regulatory takings lawsuits over time municipal regulatory power in hydrocarbon governance decreased while industry power increased offering several implications for corporate responsibility and social license debates

employment trends in the u s electricity sector 2008 2012 abstract between 2008 2012 electricity generated gwh from coal the longtime dominant fuel for electric power in the us declined 24 while electricity generated from natural gas wind and solar grew by 39 154 and 400 respectively these shifts had major effects on domestic employment in those sectors of the coal natural gas wind and solar industries involved in operations and maintenance o m activities for electricity generation using an economic input output model we estimate that the coal industry lost more than 49 000 jobs 12 nationally over the five year period while in the natural gas solar and wind industries employment increased by nearly 175 000 jobs 21 we also combine published ratios for jobs per unit of fuel production and per megawatt of power plant capacity with site specific data on fuel production and power plant retirements additions and capacity changes to estimate and map direct job changes at the county level the maps show that job increases in the natural gas solar and wind industries generally did not occur where there were significant job losses in the coal industry particularly in west virginia and kentucky

dutch disease economics and oil syndrome an empirical study abstract this paper integrates the existing dutch disease models of an oil boom into a reduced form three sector model and estimates it for five developing oil exporting countries having significant agricultural and manufacturing sectors time series annual data for the period 1966 1986 are used for algeria ecuador indonesia nigeria and venezuela their output composition is altered by an increase in their oil revenues the spending effect and in the world price of manufactured goods relative to agricultural products the world price effect both effects expand the manufacturing sectors of these countries and contract their agricultural sectors the spending effect expands their nontraded sectors whereas the world price effect may expand or contract them the opposite results are implied for the oil collapse of the 1980s

the distributional impacts of an energy boom in western canada in the energy rich region of western canada inequality rose over the past two decades while poverty declined begging the question of whether the recent energy boom was a contributing factor this study uses measures of inequality and poverty across local labor markets that vary in energy extraction intensity to identify these distributional impacts the evidence shows that overall the boom increased inequality and decreased poverty there are however a few notable cases where these relationships are reversed the significance and relative magnitude of growth across and between distributional segments were consistent with these findings

taxation and kalecki s theory of the business cycle michal kalecki s theories of tax incidence and the business cycle are integrated to demonstrate how the amplitude of the business cycle is affected by the taxation of wages and profits the impact of taxation depends on the stage of the cycle the economy s long run position the direction of tax policy and the process and degree of tax shifting with no tax shifting a wage tax dampens the cycle and a profits tax amplifies it with tax shifting the effects of both taxes become indeterminate c 1996 academic press limited copyright 1996 by oxford university press

arbitrage equilibria in large games with many commodities abstract can identical goods sell at different prices in identical markets when people are perfectly mobile we provide a formal account of strategic behaviour in large games with many commodities and exhibit how it drives price dispersion at equilibrium interactions between agents are modelled using a shapley shubik market game we demonstrate the failure of the law of one price in this setup through a robust counterexample the proposed model and our findings constitute an alternative and plausible explanation to some anomalies which routinely appear in a wide array of fields ranging from banking business economics to international and labour economics

institutions and the resource curse countries rich in natural resources constitute both growth losers and growth winners we claim that the main reason for these diverging experiences is differences in the quality of institutions more natural resources push aggregate income down when institutions are grabber friendly while more resources raise income when institutions are producer friendly we test this theory building on sachs and warner s influential works on the resource curse our main hypothesis that institutions are decisive for the resource curse is confirmed our results contrast the claims of sachs and warner that institutions do not play a role

booming sector and de industrialisation in a small open economy this paper presents a theoretical analysis of the dutch disease the phenomenon whereby a boom in one traded goods sector squeezes porfitability in other traded goods sectors both by directly bi

what goes up must come down the recent economic cycles of the four most oil and gas dominated states in the us abstract the recent boom and bust in the us oil and natural gas sector provide a unique opportunity to assess whether the impacts of energy development are symmetric across the differing phases of the energy cycle this study uses the synthetic control method to examine the boom and bust effects for the four most oil and gas dominated states louisiana north dakota oklahoma and wyoming the four states are chosen as case studies because of their status as top oil and gas producers and the stronger influence of the oil and gas sector on their overall economies the results reveal differing employment impacts across the four states in both the short and long run and asymmetry during the boom and bust phases variation in the overall impacts and asymmetry of impacts across the boom bust cycle are suggested to be at least in part connected to state and local government expenditures

labor market impacts of u s tight oil development the case of the bakken abstract there has been a recent boom in natural gas and oil production in the us due to high energy prices and technological advances in hydraulic fracturing and horizontal drilling while north dakota oil production has increased significantly since 2005 with the development of bakken formation the impact on the rest of the economy including agriculture historically the largest industry in north dakota has received little attention we employ a variant of the corden neary resource development model to test the impact of the oil boom in north dakota caused by technical change on employment and wages in two tradable sectors of the state economy agriculture and energy alongside the rest of the state s economy using a vector error correction vec model marking the very first use of the dynamic vector autoregression var analysis in this theoretical framework it was determined that the oil boom as represented by the number of rigs in the state led to an increase in employment and wages in energy sector as expected but also in the rest of the economy oil development activity had no significant impact on agricultural wages both energy sector equations employment and wage suggest relative independence of these variables from the movements in agriculture and the rest of the economy and being impacted mostly by the changes in energy sector itself seasonality does not play significant role in energy sector employment and wages unlike in agriculture and the rest of the economy

resource abundance and economic growth in the united states abstract it is a common assumption that regions within the same country converge to approximately the same steady state income levels the so called absolute convergence hypothesis focuses on initial income levels to account for the variability in income growth among regions empirical data seem to support the absolute convergence hypothesis for us states but the data also show that natural resource abundance is a significant negative determinant of growth we find that natural resource abundance decreases investment schooling openness and r d expenditure and increases corruption and we show that these effects can fully explain the negative effect of natural resource abundance on growth

the effects of a natural gas boom on employment and income in colorado texas and wyoming improvements in technology have made it profitable to tap unconventional gas reservoirs in relatively impermeable shale and sandstone deposits which are spread throughout the u s mostly in rural areas proponents of gas drilling point to the activity s local economic benefits yet no empirical studies have systematically documented the magnitude or distribution of economic gains i estimate these gains for counties in colorado texas and wyoming three states where natural gas production expanded substantially since the late 1990s i find that a large increase in the value of gas production caused modest increases in employment wage and salary income and median household income the results suggest that each million dollars in gas production created 2 35 jobs in the county of production which led to an annualized increase in employment that was 1 5 of the pre boom level for the average gas boom county comparisons show that ex ante estimates of the number of jobs created by developing the fayetteville and marcellus shale gas formations may have been too large

local labor market impacts of energy boom bust boom in western canada abstract the impacts of energy price boom and bust are analyzed through the differential growth in employment and earnings between local labor markets with and without energy resources in western canada the estimated differentials attributed to the boom induced labor demand shocks show significant direct and indirect impacts on the earnings and employment within the energy extraction and other non energy local sectors respectively the local job multipliers indicate that job creation within the energy extraction sector leads to modest job creation within the non energy local sectors during boom periods for every ten energy extraction jobs created during a boom period approximately three construction jobs two retail jobs and four and a half service jobs are created

avoiding the resource curse indigenous communities and canada s oil sands summary concerns about a resource curse in canada have been raised in response to rapid growth in the petroleum sector in northern alberta in previous research there has been little consideration of how symptoms of the resource curse are experienced and managed at a regional scale and by indigenous communities an analysis of effects and responses is offered using a natural financial human and social capitals framework without consideration of how to manage the symptoms of the resource curse oil and gas activity is likely to further disadvantage indigenous populations already living on the margins of canadian society

local labor markets and natural resources a synthesis of the literature a primary way that natural resources affect a locality is through the demand for labor with greater extraction requiring more workers shifts in labor demand can be measured through changes in employment and earnings the main labor market outcomes or through changes in the population and income more generally these changes may spillover into the nonresource economy leading to greater overall effects or possibly crowd out be spread unequally across the population thereby altering the distribution of income and the poverty rate or influence educational attainment as people choose between additional schooling and work in this review the literature linking natural resources to local labor markets is synthesized by organizing existing studies according to their resource measurement and the outcomes that they consider this synthesis provides an accessible guide to a literature that has boomed in recent years it also identifies promising avenues for future research and lays a foundation to further generalize the evidence through an eventual meta analysis

optimal environmental taxation in the presence of other taxes general equilibrium analyses this paper examines the optimal setting of environmental taxes in economies where other distortionary taxes are present we employ analytical and numerical models to explore the degree to which in a second best economy optimal environmental tax rates differ from the rates implied by the pigovian principle according to which the optimal tax rate equals the marginal environmental damages both models indicate contrary to what several analysts have suggested that the optimal tax rate on emissions of a given pollutant is generally less than the rate supported by the pigovian principle moreover the optimal rate is lower the larger are the distortions posed by ordinary taxes numerical results indicate that previous studies may have seriously overstated the size of the optimal carbon tax by disregarding pre existing taxes this abstract was borrowed from another version of this item

how geographic distance and political ideology interact to influence public perception of unconventional oil natural gas development a growing area of research has addressed public perception of unconventional oil and natural gas development via hydraulic fracturing fracking we extend this research by examining how geographic proximity to such extraction interacts with political ideology to influence issue support regression analysis of data from a fall 2013 national telephone survey of united states residents reveals that as respondents geographic distance from areas experiencing significant development increases political ideology becomes more strongly associated with issue support with the liberal partisan divide widening our findings support construal level theory s central premise that people use more abstract considerations like political ideology the more geographically removed they are from an issue we discuss implications for studying public opinion of energy development as well as for risk communication

an institutional theory of hydraulic fracturing policy the use of high volume horizontal hydraulic fracturing fracking has increased substantially over the past five years in the united states use of this drilling technology to extract natural gas from hitherto impermeable shale is expected to increase even more in coming decades two institutions integration contracts and well spacing requirements evolved to mitigate the common pool economic wastes associated with conventional oil and gas drilling u s regulators have applied these institutions to fracking however shale plays differ geologically from conventional plays and are subject to different extractive technologies we theorize that the point source pollution characteristics of conventional drilling allowed integration contracts and well space requirements to minimize local negative environmental externalities as an unintended byproduct of minimizing common pool economic wastes the non point source pollution characteristics of fracking however make these institutions insufficient to minimize negative environmental externalities associated with drilling in shale plays because the economic waste problem is different if policymakers understand the crucial differences between conventional oil and gas plays and shale plays and the drilling technologies applied to them they should be better equipped to craft fracking regulatory policies that internalize problematic externalities

economics of modern energy boomtowns do oil and gas shocks differ from shocks in the rest of the economy abstract the us shale boom has intensified interest in how the expanding oil and gas sector affects local economic performance research has produced mixed results and has not compared how energy shocks differ from equal sized shocks elsewhere in the economy what emerges is that the estimated impacts of energy development vary by region empirical methodology as well as the time horizon that is considered this paper captures these dimensions to present a more complete picture of energy boomtowns utilizing us county data we estimate the effects of changes in oil and gas extraction employment on total employment growth as well as growth by sector we compare this to the effects of equal sized shocks in the rest of the economy to assess whether energy booms are inherently different the analysis is performed separately for nonmetropolitan and metropolitan counties using instrumental variables we difference over 1 3 6 and 10 year time periods to account for county fixed effects and to assess responses across different time horizons the results show that in nonmetro counties energy sector multiplier effects on total county employment first increase up to 6 year horizons and then decline for 10 year horizons we also observe positive spillovers to the non traded goods sector while spillovers are small or negative for traded goods in metro counties there are no significant effects on total employment although positive spillovers are present in some sectors yet equal sized shocks in the rest of the economy produce more jobs on average than oil and gas shocks suggesting that policymakers should seek more diversified development

persistent commodity shocks and transitory crime effects abstract this paper studies the dynamic response of crime to a positive income shock we estimate the short and medium run effects that an increase in copper price had on the local economy and on criminal activity in chile which is the world s leading copper producer after a decade of high prices mining municipalities did not exhibit lower crime rates compared to non mining municipalities to explain this counterintuitive result we investigated heterogeneous dynamic effects and observed that property crimes decreased only at the beginning of the boom as the dynamics of unskilled employment are consistent with the crime cycle we argue that crime evolves due to temporary labor market adjustments

costs benefits and the malleability of public support for fracking abstract public opinion plays an important role in shaping the policy debate over hydraulic fracturing at both the state and national level however most americans report having little to no information about this controversial practice that has transformed the u s energy market employing an experiment embedded on a nationally representative survey we examine how citizens respond to arguments concerning the costs and benefits of fracking and incorporate them into their policy preferences arguments emphasizing the economic benefits of fracking bolster support for the technique however these gains are completely canceled if paired with a discussion of fracking s environmental costs additionally we find mixed evidence of partisan motivated reasoning in how this information is processed individuals whose partisan attachments and preexisting beliefs about global climate change conflict are particularly responsive to arguments about the benefits and costs of fracking our results have important implications for scholars and policymakers concerned with partisan polarization in public opinion toward energy and environmental policy

the impact of fracking activities on oklahoma s housing prices a panel cointegration analysis abstract fracking drilling has opened a discussion on the role of technological developments in economies engaged in shale oil and gas formations oil and natural gas production opened new possibilities for employment benefits and housing prices decreases this paper explores for the first time the impact of fracking on housing prices across oklahoma s counties spanning the period 2000 2015 through panel methods the findings show a positive effect on housing prices while this positive effect gains statistical significance only over the period after the 2006 fracking boom the results survive a robustness check that explicitly considers distance and groundwater dependency issues

income and employment effects of shale gas extraction windfalls evidence from the marcellus region abstract new technologies combining hydraulic fracturing and horizontal drilling in oil and gas extraction are creating a sudden expansion of production residents of places where deep underground oil and gas deposits are found want to know about the broader economic social and environmental impacts of these activities that generate windfall income for some residents we first review the literature on windfall spending patterns then using the marcellus region the earliest area to be tapped using the new techniques we estimate county level employment and income effects for robustness we employ two methods using a propensity score matching approach we find no effect of fracking on income or employment a panel fixed effect regression approach suggests statistically significant employment effects in six out of seven alternative specifications but significant income effects in only one out of seven specifications in short the income spillover effects in the marcellus region appear to be minimal meaning there s little incentive at the county level to incur current or potential future costs that may be associated with this activity we conclude with some ideas on how localities might employ policies that would allow natural gas extraction to move forward benefitting landowners while establishing some financial safeguards for the broader community

the regional economic impact of oil and gas extraction in texas abstract this paper empirically investigates the regional economic impact of oil and gas extraction in texas during the recent shale oil boom regressions with county level data over the period 2009 2014 support smaller multiplier effects on local employment and income than corresponding estimates drawn from popular input output based studies economic impacts were larger for extraction from gas wells than oil wells while the drilling phase generated comparable impacts estimates of economic impacts are greater in a dynamic spatial panel model that allows for spillover effects across local economies as well as over time

dutch disease dynamics reconsidered abstract in this paper we develop the first model to incorporate the dynamic productivity consequences of both the spending effect and the resource movement effect of oil abundance we show that doing so dramatically alters the conclusions drawn from earlier models of learning by doing lbd and the dutch disease in particular the resource movement effect suggests that the growth effects of natural resources are likely to be positive turning previous growth results in the literature relying on the spending effect on their head we motivate the relevance of our approach by the example of a major oil producer norway empirically we find that the effects of an increase in the price of oil may resemble results found in the earlier dutch disease literature while the effects of increased oil activity increases productivity in most industries therefore models that only focus on windfall gains due to increased spending potential from higher oil prices would conclude incorrectly based on our analysis that the resource sector cannot be an engine of growth

retrading in market games when agents are not price takers they typically cannot obtain an efficient real location of resources in one round of trade this paper presents a non cooperative model of imperfect competition where agents can retrade allocations consistent with edgeworth s idea of recontracting we show a there are pareto optimal allocations including competitive equilibrium allocations that can be approximated arbitrarily closely when trade is myopic i e when agents play a static nash equilibrium at every round of retrading b any converging sequence of allocations generated by myopic retrading can be supported along some retrade proof subgame perfect equilibrium path when traders anticipate future rounds of trading

natural resource ownership financial gains and governance the case of unconventional gas development in the uk and the us abstract who owns an area s natural resources affects the local financial gains from extraction and participation in resource governance we develop a typology of ownership regimes using two dimensions of ownership private versus public and local versus absentee and apply it to unconventional natural gas development in the united kingdom uk and the state of pennsylvania in the united states we find that local residents in pennsylvania own 53 of the acreage leased for development and capture an estimated 8 5 of the value of production of the typical well more than double what is expected from a well in the uk s public absentee regime despite revenue sharing policies the dollar amount of local payments is also larger in pennsylvania with the difference reflecting policies and institutions not differences in the value of production the pennsylvania case provides a benchmark for public absentee owners considering policies to direct payments to communities hosting extraction it gives the local payments corresponding to the case where subsurface owners voluntarily negotiate lease terms with energy firms and roughly half of ownership revenues accrue locally

the geopolitical impact of the shale revolution exploring consequences on energy prices and rentier states while the shale revolution was largely a us affair it affects the global energy system in this paper we look at the effects of this spectacular increase in natural gas and oil extraction capacity can have on the mix of primary energy sources on energy prices and through that on internal political stability of rentier states we use two exploratory simulation models to investigate the consequences of the combination of both complexity and uncertainty in relation to the global energy system and state stability our simulations show that shale developments could be seen as part of a long term hog cycle with a short term drop in oil prices if unconventional supply substitutes demand for oil these lower oil prices may lead to instability in rentier states neighbouring the eu especially when dependence on oil and gas income is high youth bulges are present or buffers like sovereign wealth funds are too limited to bridge the negative economic effects of temporary low oil prices

sunspots correlation and competition correlated equilibria in strategic market games played simultaneously by overlapping generations of players correspond to sunspot equilibria in the associated competitive economy we provide a necessary and sufficient condition for existence of effective correlation an increase in the number of agents in a given economy may allow for effective correlation

who benefits from local oil and gas employment labor market composition in the oil and gas industry in texas and the rest of the united states abstract this paper examines local labor market outcomes from an oil and gas boom we examine two main outcomes the probability of employment and the log wages of workers employed outside the oil and gas industry for texas and the rest of the united states across gender race and ethnicity we find that men and women gain employment in the oil and gas industry during booms but such gains are much larger for men and are largest for black and hispanic men we also find positive income spillovers for workers in other industries that are similar in magnitude across demographic groups

rational expectations in the overlapping generations model abstract this paper reports results on the character of the rational expectations equilibria of a stochastic overlapping generations model with heterogenous markets the model considered is a stationary overlapping generations model in which the endowments of young agents are subject to i i d random shocks the main result shown is that if there are l 1 commodities traded in every period then for most preferences the rational expectations equilibrium stochastic process of prices and allocations necessarily exhibits serial correlation this is in marked contrast to the one commodity model in which there always exists an equilibrium which is measure isomorphic to the endowment process

cornucopia or curse reviewing the costs and benefits of shale gas hydraulic fracturing fracking this study assesses the overall technical economic environmental and social costs and benefits of the hydraulic fracturing fracking of natural gas drawn from a review of more than 100 studies looking at shale gas in the past 10 years most of them peer reviewed this article begins by briefly explaining the process of hydrofracking and summarizing recent market trends up until late 2013 then the study discusses a series of advantages and disadvantages to hydrofracking it notes that done properly shale gas development can enhance energy security and the availability of energy fuels lower natural gas prices offer a cleaner environmental footprint than some other fossil fuels and enable local economic development however done poorly production can be prone to accidents and leakage contribute to environmental degradation induce earthquakes and when externalities are accounted for produce more net economic losses than profits the study concludes that the pursuit and utilization of shale gas thus presents policymakers planners and investors with a series of pernicious tradeoffs and tough choices

what blows in with the wind the shift toward renewable forms of energy for electricity generation in the electricity generation industry has clear implications for the spatial distribution of generating plant traditional forms of generation are typically located close to the load or population centers while wind and solar powered generation must be located where the energy source is found in the case of wind this has meant significant new investment in wind plant in primarily rural areas that have been in secular economic decline this article investigates the localized economic impacts of the rapid increase in wind power capacity at the county level in texas unlike input output impact analysis that relies primarily on levels of inputs to estimate gross impacts we use traditional econometric methods to estimate net localized impacts in terms of employment personal income property tax base and key public school expenditure levels while we find evidence that both direct and indirect employment impacts are modest significant increases in per capita income accompany wind power development county and school property tax rolls also realize important benefits from the local siting of utility scale wind power although peculiarities in texas school funding shift localized property tax benefits to the state

the economic aftermath of resource booms evidence from boomtowns in the american west the current us oil and gas boom is injecting labour capital and revenue into communities near reserves will these communities be cursed with lower long run incomes in the wake of the boom we study the oil boom and bust cycle of the 1970s and 1980s to gain insights using annual data on drilling to identify western boom and bust counties we find substantial positive local employment and income effects during the boom in the aftermath of the bust however we find that incomes per capita decreased and unemployment compensation payments increased relative to what they would have been if the boom had not occurred