The Short-Run and Long-Run Effects of Resources on Economic Outcomes: Evidence from the United States 1936-2015

57 Pages Posted: 13 Jun 2018

See all articles by Karen Clay

Karen Clay

Carnegie Mellon University - H. John Heinz III School of Public Policy and Management; National Bureau of Economic Research (NBER)

Margarita Portnykh

Carnegie Mellon University

Date Written: June 2018

Abstract

This paper draws on a new state-level panel dataset and a model of domestic Dutch disease to examine the short-run and long-run effects of oil & natural gas, coal, and agricultural land endowments on state economies during 1936-2015. Using a flexible shift-share estimation approach, where the shift is national resource employment and the share is state resource endowment, we find that different resources had different short-run effects in different time periods, across increases and decreases in resource employment, and across different outcomes. Using long differences, we find that long-run population growth was an important margin of adjustment over 1936-2015. States with larger coal and agricultural endowments per square mile experienced significantly slower population growth than states with smaller endowments per square mile. Resource endowments had no effect on long-run growth in per capita income.

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Suggested Citation

Clay, Karen B. and Portnykh, Margarita, The Short-Run and Long-Run Effects of Resources on Economic Outcomes: Evidence from the United States 1936-2015 (June 2018). NBER Working Paper No. w24695. Available at SSRN: https://ssrn.com/abstract=3194925

Karen B. Clay (Contact Author)

Carnegie Mellon University - H. John Heinz III School of Public Policy and Management ( email )

Pittsburgh, PA 15213-3890
United States

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Margarita Portnykh

Carnegie Mellon University ( email )

Pittsburgh, PA 15213-3890
United States

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