Work

The economic impact of uncertainty about U.S. regulations of the energy sector

Year: 2025

Type: article

Abstract: This paper examines the economic impact of uncertainty surrounding U.S. regulatory policies of the energy sector. We first construct a monthly‐frequency measure of regulatory uncertainty related to oil and gas production using natural language processing on over 600,000 U.S. newspaper articles published from 1985 to 2021. We then conduct empirical analysis via structural VAR models with the constructed oil regulatory uncertainty index, oil market variables, and aggregate economic data. The impulse response functions suggest that an increase in oil regulatory uncertainty reduces oil production and drilling activity and negatively affects national and state‐level economic outcomes.

Source: Economic Inquiry

DOI: 10.1111/ecin.13295

Authors: Xiaohan Ma, Zhoudan Xie

Institutions: Texas Tech University, George Washington University

Language: English

Topic: Market Dynamics and Volatility

Subfield: Economics and Econometrics

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDG: Decent work and economic growth

Open Access status: bronze

Funders: George Washington University, Texas Tech University