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Journal Article
Disruptions to Russian Energy Supply Likely to Weigh on European Output
The Russia-Ukraine war and subsequent oil sanctions from European countries have substantially disrupted the supply of Russian oil and gas. We estimate the effects of these disruptions on European output and find that a decline in the Russian oil and gas supply in 2022 could lead to a sizable drop in European output over 2023–24, though the effect differs across countries and sectors .
Working Paper
Price Setting and Volatility: Evidence from Oil Price Volatility Shocks
How do changes in aggregate volatility alter the impulse response of output to monetary policy? To analyze this question, I study whether individual prices in Producer Price Index micro data are more likely to change and to move in the same direction when aggregate volatility is high, which would increase aggregate price exibility and reduce the effectiveness of monetary policy. Taking advantage of plausibly exogenous oil price volatility shocks and heterogeneity in oil usage across industries, I find that price changes are more dispersed and less frequent, implying that prices are less ...
Working Paper
Capturing rents from natural resource abundance: private royalties from U.S. onshore oil and gas production
Innovation-spurred growth in oil and gas production from shale formations led the U.S. to become the global leader in producing oil and natural gas. Because most shale is on private lands, drilling companies must access the resource through private lease contracts that provide a share of the value of production ? a royalty ? to mineral owners. We investigate the competitiveness of leasing markets by estimating how much mineral owners capture geologically-driven advantages in well productivity through a higher royalty rate. We estimate that the six major shale plays generated $39 billion in ...
Working Paper
Response of Consumer Debt to Income Shocks: The Case of Energy Booms and Busts
This paper investigates how consumers respond to local income shocks as a result of booms and busts in oil and gas development. Oil and gas development generates potentially large streams of income via wages and salaries to workers and royalty income to mineral rights owners. Changes in development may lead consumers to increase their spending depending on their exposure to income shocks. Using quarterly information on consumer debt and oil and gas activity, I ?nd that consumer debt increased at a peak of $840 per capita in counties with shale endowment and increased drilling. Each well ...
Journal Article
Evaluating a Year of Oil Price Volatility
Troy Davig, Nida ak?r Melek, Jun Nie, Lee Smith, and Didem Tzemen find changes in expectations of future oil supply relative to demand are the main drivers of the recent oil price decline.
Journal Article
Lifting the U.S. Crude Oil Export Ban: Prospects for Increasing Oil Market Efficiency
Repealing the U.S. ban on crude oil exports led to increased trade and efficiency in the oil market.
Working Paper
Asset Ownership, Windfalls, and Income: Evidence from Oil and Gas Royalties
How does local versus absentee ownership of natural resources?and their associated income?shape the relationship between extraction and local income? Theory and empirics on natural resources and the broader economy have focused heavily on labor markets, largely ignoring the economic implications of payments to resource owners. We study how local ownership of oil and gas rights shapes the local income effects of extraction. For the average U.S. county that experienced an increase in oil and gas production from 2000 to 2013, increased royalty income and its associated economic stimulus ...
Journal Article
The response of employment to changes in oil and gas exploration and drilling
Oil prices declined significantly during the summer of 2014, leading to a subsequent decline in energy exploration and drilling. By the end of April 2015, rig counts were down 49 percent. In the past, these declines have disproportionately affected the economies of oil- and gas-producing states, decreasing statewide employment and inducing ?regional recessions.?
Working Paper
The U.S. Shale Oil Boom, the Oil Export Ban, and the Economy: A General Equilibrium Analysis Nida
This paper examines the e ects of the U.S. shale oil boom in a two-country DSGE model where countries produce crude oil, re ned oil products, and a non-oil good. The model in- {{p}} corporates di erent types of crude oil that are imperfect substitutes for each other as inputs into the re ning sector. The model is calibrated to match oil market and macroeconomic data for the U.S. and the rest of the world (ROW). {{p}} We investigate the implications of a signicant {{p}} increase in U.S. light crude oil production similar to the shale oil boom. Consistent with the data, our model predicts that ...
Working Paper
Oil, Equities, and the Zero Lower Bound
From late 2008 to 2017, oil and equity returns were more positively correlated than in other periods. In addition, we show that both oil and equity returns became more responsive to macroeconomic news. We provide empirical evidence and theoretical justification that these changes resulted from nominal interest rates being constrained by the zero lower bound (ZLB). Although the ZLB alters the economic environment in theory, supportive empirical evidence has been lacking. Our paper provides clear evidence of the ZLB altering the economic environment, with implications for the effectiveness of ...