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We examine the implications of the U.S. shale oil boom for the U.S. economy, trade balances, and the global oil market. Using comprehensive data on different types of crude oil, and a two-country general equilibrium model with heterogenous oil and refined products, we show that the shale boom boosted U.S. real GDP by 1 percent and improved the oil trade balance as a share of GDP by more than 1 percentage points from 2010 to 2015. The boom led to a decline in oil and fuel prices, and a dramatic fall in U.S. light oil imports. In addition, we find that the crude oil export ban, which was in place during a large part of this boom, was a binding constraint, and would likely have remained a binding constraint thereafter had the policy not been removed at the end of 2015.
JEL Classification: F41, Q33, Q38, Q43
Çakır Melek, Nida, Michael Plante, and Mine K. Yücel. 2017. “Resource Booms and the Macroeconomy: The Case of U.S. Shale Oil.” Federal Reserve Bank of Kansas City, Research Working Paper 17-10, September. Available at External Linkhttps://doi.org/10.18651/RWP2017-10