US

Oil Prices

The recent decline in oil prices will promote higher real GDP in the US over the next couple of years.

Responses weighted by each expert's confidence

Participant University Vote Confidence Bio/Vote History
Acemoglu
Daron Acemoglu
MIT
Agree
4
Bio/Vote History
There will be a negative effect on the now sizable US energy sector, but the positive impact on the rest of the economy should dominate.
Alesina
Alberto Alesina
Harvard Did Not Answer Bio/Vote History
Altonji
Joseph Altonji
Yale
Agree
8
Bio/Vote History
Auerbach
Alan Auerbach
Berkeley
Agree
3
Bio/Vote History
Autor
David Autor
MIT
Agree
6
Bio/Vote History
Baicker
Katherine Baicker
University of Chicago Did Not Answer Bio/Vote History
Banerjee
Abhijit Banerjee
MIT
Agree
6
Bio/Vote History
Bertrand
Marianne Bertrand
Chicago
Agree
4
Bio/Vote History
Brunnermeier
Markus Brunnermeier
Princeton
Strongly Agree
8
Bio/Vote History
A decline in oil prices leads to redistribution of wealth within the US, which favors (sub)sectors with impaired balance sheet constraints.
Chetty
Raj Chetty
Harvard
Agree
5
Bio/Vote History
Chevalier
Judith Chevalier
Yale
Agree
7
Bio/Vote History
Obviously, there are losers as well as winners, but the US economy benefits on net.
Currie
Janet Currie
Princeton Did Not Answer Bio/Vote History
Cutler
David Cutler
Harvard
Strongly Agree
6
Bio/Vote History
Deaton
Angus Deaton
Princeton
Agree
9
Bio/Vote History
We are still net importers, right. But there could be second round effects, especially political, that could moderate or even reverse it.
Duffie
Darrell Duffie
Stanford
Agree
7
Bio/Vote History
Oil production investment is a negative, but reducing the cost of a raw input nets to positive, unless oil exports heavily dominate imports.
Edlin
Aaron Edlin
Berkeley
Agree
8
Bio/Vote History
U.S. is a large net importer. Increased oil prices in the past have slowed GDP growth.
Eichengreen
Barry Eichengreen
Berkeley
Agree
5
Bio/Vote History
Einav
Liran Einav
Stanford
Uncertain
5
Bio/Vote History
Fair
Ray Fair
Yale
Agree
5
Bio/Vote History
Finkelstein
Amy Finkelstein
MIT
Uncertain
5
Bio/Vote History
Goldberg
Pinelopi Goldberg
Yale
Uncertain
5
Bio/Vote History
Costs would go down, Fed may keep rates low. But negative effects on oil exploration, production and potential future oil exports.
Goolsbee
Austan Goolsbee
Chicago
Strongly Agree
10
Bio/Vote History
but not as much as in the old days because the economy is more energy efficient now and because we have become a significant producer of oil
Greenstone
Michael Greenstone
University of Chicago
Agree
7
Bio/Vote History
Hall
Robert Hall
Stanford
Uncertain
5
Bio/Vote History
The 1986 decline had little effect on real GDP. Oil prices don't shift production functions. Real income rises, but not real output.
Hart
Oliver Hart
Harvard
Agree
7
Bio/Vote History
There are potentially confounding general equilibrium effects but the US as a net importer of oil should benefit from increased fracking.
Holmström
Bengt Holmström
MIT
Agree
7
Bio/Vote History
Hoxby
Caroline Hoxby
Stanford
Strongly Agree
10
Bio/Vote History
The U.S. econom remains strongly anti-cyclical in oil prices. Some industries suffer from lower prices, but they are dominated by winners.
Hoynes
Hilary Hoynes
Berkeley
Agree
8
Bio/Vote History
Judd
Kenneth Judd
Stanford
Strongly Agree
8
Bio/Vote History
Kaplan
Steven Kaplan
Chicago Booth
Agree
8
Bio/Vote History
Kashyap
Anil Kashyap
Chicago Booth
Strongly Agree
7
Bio/Vote History
For the average household this will be a like a tax cut, of course oil producing states suffer a bit, but overall this good news for the US
Klenow
Pete Klenow
Stanford
Agree
1
Bio/Vote History
Ceteris paribus. And because the U.S is still a net importer.
-see background information here
Levin
Jonathan Levin
Stanford
Agree
3
Bio/Vote History
Maskin
Eric Maskin
Harvard
Agree
7
Bio/Vote History
Nordhaus
William Nordhaus
Yale
Strongly Agree
8
Bio/Vote History
Both because of quasi-fiscal stimulus and lower measured inflation.
Saez
Emmanuel Saez
Berkeley
Agree
3
Bio/Vote History
Samuelson
Larry Samuelson
Yale
Agree
8
Bio/Vote History
The decline in price is less significant than the technological progress in resource extraction it reflects, which should promote growth.
Scheinkman
José Scheinkman
Columbia University
Agree
6
Bio/Vote History
But if drop is result of correct forecast of weaker world economic activity, it will be hard to identify the net benefit ex-post.
Schmalensee
Richard Schmalensee
MIT
Agree
7
Bio/Vote History
Shapiro
Carl Shapiro
Berkeley
Strongly Agree
9
Bio/Vote History
Shimer
Robert Shimer
University of Chicago
Agree
7
Bio/Vote History
The US is still a net energy importer and the shock is largely a supply shock. But this will cause some reallocation away from shale
Thaler
Richard Thaler
Chicago Booth
Agree
7
Bio/Vote History
Udry
Christopher Udry
Northwestern
Uncertain
7
Bio/Vote History
We have almost balanced trade in energy; the net effect will be very small (although there will be distributional effects).