"Firm Dynamics and Local Economic Shocks: Evidence from the Shale Oil and Gas Boom," is a talk by Ryan A. Decker, Board of Governors, Federal Reserve System.
New businesses account for an outsized share of job creation. Understanding their precise role is difficult, however, since new business formation may either cause or be caused by broader economic conditions. We study a natural experiment, the shale oil and gas boom of the mid-2000s, in which drilling and extraction innovations interacted with preexisting geology in certain US regions to generate large economic expansions.
We find that new firms and newly formed establishments of existing firms account for the bulk of shale-induced job growth, a finding with important implications for macroeconomic policy and the study of firm behavior in economics.
Sponsored by the Department of Economics Danforth-Lewis Speakers Series.