An Oil-Producing State's Ability to Cope after a Regional Free Trade Agreement: The Case of Texas and NAFTA

The International Trade Journal, 29(4): 309-336, 2015

32 Pages Posted: 1 Feb 2014 Last revised: 31 Aug 2015

See all articles by Vance Ginn

Vance Ginn

Texas Public Policy Foundation

Travis Roach

University of Central Oklahoma - Department of Economics

Date Written: July 27, 2015

Abstract

This article examines the potential economic effects that the 1994 North American Free Trade Agreement (NAFTA) had on Texas — an oil producing, large border state. We estimate a five-variable vector autoregressive (VAR) model with quarterly data from January 1976 to March 2011 and construct a structural VAR representation by imposing long-run restrictions to identify U.S. aggregate, oil price, and Texas-specific shocks. After comparing responses to these structural shocks before and after NAFTA, our results suggest that NAFTA contributed to Texas’ economy, becoming more resilient to oil price and non-Texas disruptions.

Keywords: Structural VAR, Oil Price Shocks, NAFTA, Texas

JEL Classification: C32, Q43, R10

Suggested Citation

Ginn, Vance and Roach, Travis, An Oil-Producing State's Ability to Cope after a Regional Free Trade Agreement: The Case of Texas and NAFTA (July 27, 2015). The International Trade Journal, 29(4): 309-336, 2015. Available at SSRN: https://ssrn.com/abstract=2388003 or http://dx.doi.org/10.2139/ssrn.2388003

Vance Ginn (Contact Author)

Texas Public Policy Foundation ( email )

901 Congress Avenue
Austin, TX 78701
United States
7134785255 (Phone)

HOME PAGE: http://www.texaspolicy.com/experts/detail/vance-ginn

Travis Roach

University of Central Oklahoma - Department of Economics ( email )

Edmond, OK 73034
United States

HOME PAGE: http://www.travisroach.com

Register to save articles to
your library

Register

Paper statistics

Downloads
117
rank
232,328
Abstract Views
1,407
PlumX Metrics