Texas' economic growth has consistently outpaced that of the United States as a whole over the past quarter century. What accounts for the state's economic success? And does it come at a price to be paid in the future?Ten-Gallon Economy features new research on regional economic growth and some surprising findings on Texas' unique tax and banking institutions, booming energy and export sectors, vibrant labor market, expanding demographics and human capital, and growing border economy. Texas has a dynamic economy, large yet flexible, but it is still subject to the booms and busts of the energy sector, which exercises an outsized influence. Taxes are low but regressive relative to national benchmarks, which fuels growth but can inhibit investment in education and health. Meanwhile, Texas, as one of only five minority-majority states, is poised to reap a big demographic dividend if it invests wisely in the coming generation of mostly Latino workers. Taken together, the chapters in this volume provide unique insight into the economy of the nation's second-largest state, laying out some of the choices facing policymakers charged with safeguarding the Texas growth premium for future generations. 

Pia M. Orrenius is Vice President and Senior Economist at the Federal Reserve Bank of Dallas, USA, where she leads the regional group that tracks economic growth and development in the Eleventh District. Orrenius has published extensively on the Texas economy, immigration, and labor markets, and is Executive Editor of the Dallas Fed publication Southwest Economy. Jesús Cañas is Business Economist at the Federal Reserve Bank of Dallas, USA. As member of the regional group he analyzes the regional economy. His research at the Fed also focuses on issues pertaining to the Mexican economy, the U.S.-Mexico border economy, and the maquiladora industry. Cañas has written articles for various Federal Reserve Bank publications and academic journals such as Annals of Regional Science and Growth and Change. Cañas holds a BA in Economics and Finance and an MS in Economics from the University of Texas at El Paso, USA.Michael Weiss is Senior Writer/Editor in the Research Department of the Federal Reserve Bank of Dallas, USA, and edits the quarterly, Southwest Economy. He holds an MBA in Finance from the University of Texas at Arlington, USA, an MS in Journalism from Columbia University, USA, and a BA in Public Affairs from The University of Chicago, USA.Jordana Barton, Federal Reserve Bank of Dallas, USA Roberto Coronado, Federal Reserve Bank of Dallas, USA Marycruz de León, Federal Reserve Bank of Dallas, USA John V. Duca, Federal Reserve Bank of Dallas, USA Christina English, Equal Employment Advisory Council, USA Amy Jordan, Federal Reserve Bank of Dallas, USA Kory Killgo, Federal Reserve Bank of Dallas, USA Anil Kumar, Federal Reserve Bank of Dallas, USA Nicole Lake, Blue Cross Blue Shield, USA Melissa Lopalo, Federal Reserve Bank of Dallas, USA Raquel R. Márques, Federal Reserve Bank of Dallas, USA David Neumark, University of California, Irvine, USA Elizabeth Organ, New York University, USA Emily Ryder Perlmeter, Federal Reserve Bank of Dallas, USA Keith R. Phillips, Federal Reserve Bank of Dallas, USA Michael Plante, Federal Reserve Bank of Dallas, USA Kenneth J. Robinson, Federal Reserve Bank of Dallas, USA Eduardo Saucedo, The University of Texas-Pan American, USA John Saving, Federal Reserve Bank of Dallas, USA Christopher Slijk, Federal Reserve Bank of Dallas, USA Elizabeth Sobel Blum, Federal Reserve Bank of Dallas, USA Marta Tienda, Princeton University, USA Louis Bernardo Torres Ruiz, Texas A&M University, USA Alan D. Viard, American Enterprise Institute, USA Mine K. Yücil, Federal Reserve Bank of Dallas, USA

PART I: INTRODUCTION1. Tipping Our Hats to the Ten-Gallon Economy; Pia M. Orrenius, Jesús Cañas, Michael WeissPART II: PUBLIC POLICY AND BUSINESS CLIMATE2. Increasing Jobs and Income from Work: The Role and Limitations of Public Policy; David Neumark3. Why Texas Grows Faster: The Role of Smaller Government; Jason Saving4. The Shortcomings of the Texas Margin Tax; Alan D. ViardPART III: HUMAN CAPITAL AND LABOR MARKETS5. Texas' Education Challenge: A Demographic Dividend or Bust?; Marta Tienda6. Oil Boom Lowers Human Capital Investment in Texas; Anil Kumar7. Employment Growth and Labor Market Polarization in the U.S. and Texas; Melissa LoPalo, Pia M. OrreniusPART IV: INDUSTRY AND EXPORTS8. Texas Real Estate: From the 1980s' Oil Bust to the Shale Oil Boom; John V. Duca, Michael Weiss, Elizabeth Organ9. The Evolution of Texas Banking; Kory Killgo and Kenneth J. Robinson10. The Impact of Changing Energy Prices on the Texas Economy; Mine K. Yücel, Michael Plante, Amy Jordan, Nicole Lake11. Texas Comparative Advantage and Manufacturing Exports; Jesús Cañas, Luis Bernardo Torres Ruiz, Christina EnglishPART V: BORDER AND ECONOMIC DEVELOPMENT12. So Close to Mexico: Economic Spillovers Along the TexasMexico Border; Roberto Coronado, Marycruz De León, Eduardo Saucedo13. Border Economic Recovery Lags Rest of State; Keith R. Phillips and Christopher Slijk14. Las Colonias Along the TexasMexico Border; Jordana Barton, Elizabeth Sobel Blum, Emily Ryder Perlmeter, Raquel R. Márquez