http://www.nytimes.com/2014/03/01/business/north-dakota-leads-on-the-road-to-economic-recovery.html?ref=economy&_r=0
On the road to economic recovery, some states are doing better than others. A few indicators that show how well a state is doing economically are jobs, highway miles driven, and housing prices. North Dakota is currently doing the best in all three of these categories. A huge reason for North Dakota's success is the booming market of shale oil in the state. Employment in the state has increased by 25%, and housing prices have nearly gone up by 33%. With this in mind, I wonder how many other states will implement their shale reserves.
While North Dakota is doing well, other states are not quite where they want to be economically, notably Florida and Nevada, who are both in the bottom ten in each of these categories. These categories certainly don't mean everything, as New York doesn't have a lot of driving relatively, but is top ten in job growth. However, in most cases these catagories can typically give a good indication on the economy in most states.
Even though North Dakota is doing well because of shale oil, i don't think many states will follow. Shale oil has created a controversy because of its negative impact on the environment, mainly because of its ability to pollute water sources.
ReplyDeleteIn addition to North Dakota's oil boom, the state's success likely comes from it well run government. The state does not have a budget deficit and they are letting the economy flourish on its own. I think that if other states would follow suit in getting their fiscal houses in order, America would be doing much better.
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ReplyDeleteIt is likely that North Dakota will face tougher competition from other sources of oil in the future. Last year, Mexico passed energy reforms that allowed foreign investors to invest more in their oil economy. If this takes off faster, then North Dakota's economy may slow down while they compete with other sources of energy. Furthermore, the shale oil also has negatively affected North Dakota's economy. I agree with Hannah that the shale oil boom will have bad environmental effects. If these effects worsen, the environmental damage of the shale oil boom will lessen the positive economic effects that we are currently seeing in North Dakota. In the long term, the shale oil boom may turn out to be a bad idea for North Dakota's economy.
ReplyDeleteThe definition of property rights is the most important aspect of the shale oil boom. Outside of its environmental criticism--which is relatively short-sighted in my opinion--the shale oil boom is important because it enriches the property owners in North Dakota and other states where "fracking" occurs. Mineral rights are particular to the United States legal system (Economist.com, "Saudi America"), and without them the benefits would not be dispersed across a broad swath of the population.
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