University of Kentucky
Kentucky and NAFTA
Institution
University of Kentucky
Faculty Advisor/ Mentor
Kenneth Troske
Abstract
Since the implementation of NAFTA in 1994, extensive research has been conducted to analyze the effects of NAFTA on the U.S. economy. Most of this research has focused on aggregate gains and losses of the U.S. economy as a whole, but regional and statelevel assessments prove more accurate in describing specific impacts across the United States, as resources and industrial performance differ with even small movements in geographical location. This study seeks to analyze the effects of NAFTA on Kentucky's economy, as the state has been largely overlooked in terms of extensive evaluation. We used data obtained from WISERTrade, the World Institute for Strategic Economic Research, to begin a regression analysis specifying the effects of NAFTA on Kentucky exports. Total dollar values of exports to the top 25 countries that import Kentucky goods from 1988 to 2000, including Canada and Mexico, gave us a good idea of possible trends affected by NAFTA. We also looked at Gross Domestic Product and Real Gross Domestic Income for all of those countries for specified years so that we could determine any noticeable differences that could be attributable to the trade agreement. We expected to find that NAFTA has had a modestly positive effect on Kentucky's economy, specifically on export growth and diversity, a common finding for other regional and state-level assessments. We anticipated varied effects of NAFTA on the Gross Domestic Product and Real Gross Domestic Income of those countries labeled as primary recipients of Kentucky exports.
Kentucky and NAFTA
Since the implementation of NAFTA in 1994, extensive research has been conducted to analyze the effects of NAFTA on the U.S. economy. Most of this research has focused on aggregate gains and losses of the U.S. economy as a whole, but regional and statelevel assessments prove more accurate in describing specific impacts across the United States, as resources and industrial performance differ with even small movements in geographical location. This study seeks to analyze the effects of NAFTA on Kentucky's economy, as the state has been largely overlooked in terms of extensive evaluation. We used data obtained from WISERTrade, the World Institute for Strategic Economic Research, to begin a regression analysis specifying the effects of NAFTA on Kentucky exports. Total dollar values of exports to the top 25 countries that import Kentucky goods from 1988 to 2000, including Canada and Mexico, gave us a good idea of possible trends affected by NAFTA. We also looked at Gross Domestic Product and Real Gross Domestic Income for all of those countries for specified years so that we could determine any noticeable differences that could be attributable to the trade agreement. We expected to find that NAFTA has had a modestly positive effect on Kentucky's economy, specifically on export growth and diversity, a common finding for other regional and state-level assessments. We anticipated varied effects of NAFTA on the Gross Domestic Product and Real Gross Domestic Income of those countries labeled as primary recipients of Kentucky exports.