Wednesday, July 27, 2016

Poverty Maps and Darkness

From the updated OxCARRE paper [pdf, oxcarre.ox.ac.uk], Left in the Dark of Brock Smith [brockdsmith.com] and Sam Wills [wordpress.com] come these interesting maps on rural poverty.

Read on at Sam's website [wordpress.com]

Friday, July 15, 2016

New Research: Labor market dynamics and the unconventional natural gas boom: Evidence from the Marcellus region

Timothy M. Komarek ([sites.google.com], Old Dominion University) writes on

Labor market dynamics and the unconventional natural gas boom: Evidence from the Marcellus region
Abstract
The energy extraction boom of the mid 2000s impacted local economies in areas with substantial shale oil and gas reserves. I examine the impact of the energy boom on the labor market by exploiting a natural experiment in the Marcellus region. In particular, I compare counties with fracking activity in Pennsylvania, Ohio and West Virginia to the control group of counties in New York, which imposed a moratorium and later ban on fracking. I look at how the benefits to the labor demand shock are shared between industries as well as how employment and wages in related industries adjust over the course of the resource boom. The results suggest total employment and wages per job increase by 7% and 11% respectively above pre-boom levels in the three years after the boom, but decline after 4 years or more. The results also show significant positive spillovers to related sectors, such as construction, transportation, retail trade and accommodations. However, there is no evidence of the so called ‘resource curse’ crowding out employment or increasing wages in manufacturing.
Published in Resource and Energy Economics, Volume 45, August 2016, Pages 1–17, available here [sciencedirect.com].

Wednesday, July 13, 2016

New research: Resource revenue management and wealth neutrality in Norway


Klaus Mohn ([uis.no], University of Stavanger) writes on

Resource revenue management and wealth neutrality in Norway
Abstract:
An important idea behind the Norwegian oil fund mechanism and the fiscal spending rule is to protect the non-oil economy from the adverse effects of excessive spending of resource revenues over the Government budget. A critical assumption in this respect is that public sector saving is not being offset by private sector dissaving, which is at stake with the hypothesis of Ricardian equivalence. Based on a framework of co-integrating saving rates, this model provides an empirical test of the Ricardian equivalence hypothesis on Norwegian time series data. Although the model rejects the strong-form presence of Ricardian equivalence, results indicate that the Norwegian approach does not fully succeed in separating spending of resource revenues from the accrual of the same revenues.

Published in Energy Policy, Volume 96, September 2016, Pages 446–457, find here [sciencedirect.com]

Thursday, June 30, 2016

FT: Big Oil: From black to green

From the FT: Big Oil: From black to green
Despite pressure to develop renewables, many energy majors see more money in traditional markets
Highlighting the different attempts of big oil companies to diversify to green energy, with a distinct difference apparently between European and US companies.

Read on here

Monday, June 20, 2016

New OxCARRE Research: Stranded assets, the social cost of carbon, and directed technical change: Macroeconomic dynamics of optimal climate policy

New OxCARRE research from

Frederick van der Ploeg ([ox.ac.uk], OxCARRE) and Armon Rezai ([wu.ac.at], WU - Vienna University of Economics and Business)

Stranded assets, the social cost of carbon, and directed technical change: Macroeconomic dynamics of optimal climate policy

Abstract
The tractable general equilibrium model developed by Golosov et al. (2014), GHKT for short, is modified to allow for stock-dependent fossil fuel extraction costs and partial exhaustion of fossil fuel reserves, a negative impact of global warming on growth, mean reversion in climate damages, steady labour-augmenting technical progress, specific green technical progress driven by learning by doing, population growth, and a direct effect of the stock of atmospheric carbon on instantaneous welfare. We characterize the social optimum and derive simple rule for both the optimal carbon tax and the renewable energy subsidy, and characterize the optimal amount of untapped fossil fuel.
Available here [ox.ac.uk].

Wednesday, May 25, 2016

New OxCARRE research: Mining Matters; Natural Resource Extraction and Local Business Constraints

Ralph De Haas ([ebrd.com] European Bank for Reconstruction and Development; Tilburg University) and Steven Poelhekke ([sites.google.com] Vrije Universiteit Amsterdam; De Nederlandsche Bank)

Mining Matters; Natural Resource Extraction and Local Business Constraints


We estimate the impact of local mining activity on the business constraints experienced by 22,150 firms across eight resource-rich countries. We find that the presence of active mines deteriorates the business environment in the immediate vicinity (<20 km) of a firm but relaxes business constraints of more distant firms. The negative local impact of mining is concentrated among firms in tradable sectors whose access to inputs and infrastructure becomes more constrained. This deterioration of the local business environment adversely affects firm growth and is in line with a natural resource curse at the sub-national level.

Read on here [oxcarre.ox.ac.uk]

Tuesday, May 24, 2016

New OxCARRE Research: Boom Goes The Price: Giant resource discoveries and real exchange rate appreciation

Gerhard Toews ([sites.google.com] OxCARRE, University of Oxford) and OxCARRE alumni Torfinn Harding ([sites.google.com] NHH Norwegian School of Economics) and Radek Stefanski ([weebly.com] University of St Andrews) write on

Boom Goes The Price: Giant resource discoveries and real exchange rate appreciation

Abstract:
We estimate the effect of giant oil and gas discoveries on bilateral real exchange rates. The size and plausibly exogenous timing of such discoveries make them ideal for identifying the effects of an anticipated resource boom on prices. We find that a giant discovery with the value of a country’s GDP increases the real exchange rate by 14% within 10 years following the discovery. The appreciation is nearly exclusively driven by an appreciation of the prices of non-tradable goods. We show that these empirical results are qualitatively and quantitatively in line with a calibrated model with forward looking behaviour and Dutch disease dynamics.
Full paper available here. [oxcarre.ox.ac.uk]