From Importer to Exporter: Oil Shocks and the U.S. Economy

We study how the shale revolution and the U.S. transition from petroleum importer to net exporter have changed the macroeconomic effects of oil shocks. Using oil supply news shocks identified from OPEC announcements, a time-varying model of the U.S. macroeconomy shows that the contractionary effects have weakened over time and eventually given way to an expansion. State-dependent local projections link this change to the U.S. petroleum trade balance. The improvement does not reflect a mechanical increase in aggregate net exports. Instead, consumption and equity valuations respond more favorably as the United States approaches exporter status, including in energy-intensive sectors. A counterfactual analysis of the 2022 oil-price surge implies sharply different paths for U.S. activity, prices, and monetary policy under the propagation mechanisms prevailing in the early 2000s and early 2020s.