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Journal Article
The Future of U.S. Productivity: Cautious Optimism amid Uncertainty
Recent productivity growth likely reflects both cyclical and structural factors, including remote work and AI.
Journal Article
Evaluating a Year of Oil Price Volatility
Troy Davig, Nida Cakir Melek, Jun Nie, Lee Smith, and Didem Tuzemen find changes in expectations of future oil supply relative to demand are the main drivers of the recent oil price decline.
Working Paper
The Role of Technology and Energy Substitution in Climate Change Mitigation
Mitigating climate change is critically linked to reducing an economy’s reliance on fossil energy. This paper examines U.S. energy dependence, measured by its factor share, using a neoclassical framework in a systematic way. We propose substitution as a simple, explicit economic mechanism for climate change mitigation and understanding energy-saving technical change in terms of observed factor quantities. We show that with time-varying capital equipment and energy substitutability, changes in observed inputs alone can account for most of the variations in the income share of energy over the ...
Journal Article
Powering Up: The Surging Demand for Electricity
After years of stagnant growth, U.S. electricity demand recently surged. This increase was driven in part bythe commercial sector, particularly the rapid expansion of data centers and the adoption of artificialintelligence. The surge is expected to continue, signaling a shift toward a more electrified economy, withsignificant implications for economic competitiveness and energy infrastructure.
Working Paper
Measuring the Spectrum of Occupational Emissions
Understanding how occupations differ in their exposure to emissions-intensive activities is fundamental for analyzing labor market risks amid changes in the energy mix. We develop new, data-driven measures of occupational emissions intensity that capture heterogeneity across and within industries. Our baseline Occupational Emissions Score (OES), along with wage- and concentration-adjusted variations (WOES and COES), highlights substantial differences in emissions exposure across the U.S. workforce. Applying these measures, we document several new facts: emissions are highly concentrated in a ...
Working Paper
The Missing Tail Risk in Option Prices
This paper contributes to the literature on deviations from rational expectations in financial markets and to the literature on evaluating density forecasts. We first develop a novel statistic to evaluate the overall accuracy of distributional forecasts, and find two methods that yield accurate distributional forecasts. We then propose another statistic to examine the relative accuracy over the entire distribution range. Our results indicate more oil price realizations in the left tail than predicted. We argue that this finding points to a persistent behavioral forecasting bias and a ...
Working Paper
Big Data Meets the Turbulent Oil Market
This paper introduces novel news-based measures for tracking global energy markets. These measures compress thousands of news articles into a parsimonious set of real-time indicators and are successful in-sample forecasters of oil spot, futures, and energy company stock returns, and of changes in oil volatility, production, and inventories, complementing and extending traditional (non-text) predictors. In out-of-sample tests, text-based measures predict oil futures returns and changes in oil spot prices better than traditional predictors, although the latter are more useful for forecasting ...
Working Paper
Technology and Energy Substitution: A Path toward Climate Change Mitigation*
Mitigating climate change is critically linked to reducing an economy’s reliance on fossil energy. This paper examines U.S. energy dependence, measured by its factor share, using a neoclassical framework systematically. We present the degree of substitution between different factors of production as a simple, explicit mechanism for climate change mitigation and for interpreting energy-saving technical change. With time varying capital equipment-energy substitutability, changes in observed factor quantities alone can account for most of the variations in the income share of energy over ...