International Economics

<< N°167

Issue Q3 2021  
The US shale gas revolution: An opportunity for the US manufacturing sector?  
Yassine Kirat
This paper provides new empirical evidence on the impact of the shale gas revolution on manufacturing output and trade in the United States. The shale gas boom has led to significant and persistent regional price differences in natural gas between the United States and the rest of the world. The results show that lower natural gas prices in the United States compared to Europe have led to industrial activity and investment increasing by nearly 3% and 2%, respectively. We also provide empirical evidence of structural breaks in the relationship between natural gas prices and both imports and exports. Finally, we suggest that while the shale gas revolution has helped some industries to expand, its impact on the manufacturing sector as a whole has been relatively weak.

Manufacturing ; Shale gas ; Energy prices ; Growth ; Dynamic panel data ; Keywords
C23 ; Q43 ; JEL classification
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