One of the more common questions I get, from students, people at the store, on the radio, is: how would the U.S. economy would perform if it was more like North Dakota? It is a natural question given the strong performance in North Dakota and the weaker performance in the U.S. At some level this makes the comparison of growth a bit more consistent because the distribution of activity is made identical between multiple regions. In demography/population analysis (a class I am teaching this summer) the process is called standardization. It is essentially the same idea as calculating real gross domestic product with base year prices to control for the effects of price changes on growth. So lets take a look at unemployment and real GDP for the US, MN, and ND.
For those that do not know, this is the name of the Fed’s regional condition summary (available here). The Ninth District summary (which includes North Dakota) concludes that economic performance is mixed. Strength came from manufacturing, energy and mining, consumers, and a few others. The weaker sectors included construction, farming and real estate.
Time to bore the readers with numbers. I was on Al-Jazeera in America last week talking with Ali Velshi regarding North Dakota’s energy sector. I have to admit that a live television interview was really exciting. Let’s get on with the numbers though.
The shale oil expansion began in North Dakota, and the expansion of oil output in the U.S. has been nothing short of revolutionary. However, I think it is time to recognize that the fanciful notion of “energy independence” is less and less likely to happen, if it ever really had a chance. We are surely less dependent on foreign oil as the graph shows, but it is not clear that it is going to go to zero anytime soon, if ever.