There is a big deal about understanding the impacts of oil price changes on the state economy given the legislative session underway in Bismarck. I am obviously all for such efforts. To that end I have a few graphs to offer up. Let’s consider the share of the private industry component of North Dakota Gross Domestic Product (GDP). Here is a first picture to consider:
Pretty much anytime I give a talk or go on to KNOX radio I get questions about the pace of apartment building in Grand Forks. People believe fundamentals do not justify the extent to which construction currently occurs. I generally agree and think there are a few reasons behind it. This article from the Wall Street Journal seems to indicate the local circumstances may just be part of a larger national trend.
The importance of oil to recent economic performance in North Dakota is well-documented. As the biennial legislative session gets underway the price declines of the last several months are likely on everyone’s mind, and rightly so. This Wall Street Journal article details the difficult decisions facing oil companies in the relatively near future as far as capital spending, dividends, and other expenditures are concerned. This New York Times article discusses the scaling back in rigs across the country due to lower oil prices.
Well, it is the season for many things, but right now it seems it is the season for complaints regarding Christmas shopping and the fact that many stores now open on Thanksgiving. Full disclosure, I do not go shopping at “Black Friday” sales, and I have no plans to shop on Thursday either, but that is a family choice, others may have reasons to make other choices.
Trained as an economic historian one would obviously think I would endorse a strong role for economic history. Well, I do. However, Simon Ville made a similar argument in a fantastic essay at the World Economic Forum Forum blog (link). I frequently tell people that economic history is context, the background to the economic processes covered in the theory classes. In general, economic history provides perspective. When situations break down, whether due to political institutions, preference changes, or other major events, economic history, or at least economists with an appreciation for history, tend to understand the unfolding of events better. If the recent crisis breathes further life into economic history I think it would be a boon for economic as a whole.