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On the comparative advantage of U.S. manufacturing:evidence from the shale gas revolution

Arezki, Rabah and Fetzer, Thiemo and Pisch, Frank (2016) On the comparative advantage of U.S. manufacturing:evidence from the shale gas revolution. CEP discussion paper, CEPDP1454. Centre for Economic Performance (CEP), London, UK.

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Identification Number: CEPDP1454

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

Item Type: Monograph (Discussion Paper)
Official URL: http://cep.lse.ac.uk/
Additional Information: © 2016 The Authors
Subjects: H Social Sciences > HD Industries. Land use. Labor
H Social Sciences > HF Commerce
JEL classification: L - Industrial Organization > L7 - Industry Studies: Primary Products and Construction > L71 - Mining, Extraction, and Refining: Hydrocarbon Fuels
N - Economic History > N5 - Agriculture, Natural Resources, Environment, and Extractive Industries > N52 - U.S.; Canada: 1913-
O - Economic Development, Technological Change, and Growth > O1 - Economic Development > O13 - Agriculture; Natural Resources; Energy; Environment; Other Primary Products
Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics > Q3 - Nonrenewable Resources and Conservation > Q33 - Resource Booms
R - Urban, Rural, and Regional Economics > R1 - General Regional Economics > R11 - Regional Economic Activity: Growth, Development, and Changes
Sets: Research centres and groups > Centre for Economic Performance (CEP)
Series: Working Papers > CEP Discussion Papers
Date Deposited: 26 Jan 2017 14:41
Last Modified: 26 Jan 2017 14:52
Projects: CEP Trade Programme
Funders: Economic and Social Research Council
URI: http://eprints.lse.ac.uk/id/eprint/69026

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