June 12, 2024
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Posted by NCID

Dominic Parker, Professor of Applied Economics at University of Wisconsin-Madison, visited the NCID to give as seminar entitled "Causes and Consequences of Policy Uncertainty: Evidence from McGirt vs. Oklahoma".

Argues that economists agree that policy uncertainty can distort private investment, but several questions remain. What triggers empirically significant uncertainty? And, if uncertainty impacts investment, does it do so by postponing, accelerating, or diminishing it? They examine these questions in the context of the July 2020 U.S. Supreme Court decision in McGirt vs. Oklahoma.

In an unexpected 5-4 decision, the court ruled that the eastern half of Oklahoma is "Indian Country" rather than state land. Observers, including Chief Justice Roberts, have since contended that the ruling generates considerable policy uncertainty regarding regulatory, tax, and criminal law enforcement. The analysis shows that media references to "uncertainty" alongside "Indian reservation" surged following the ruling. But has this decision genuinely hindered investment?

To explore this question, they econometrically estimate its impact on Zillow home sales and prices, as well as on oil, gas, and renewable energy investments. They find no evidence that the ruling led to a decline in home sale prices. However, there is some indication that it spurred a rush to extract oil in eastern Oklahoma.