Here is part 1 in my 7-part series:
Coal has long been considered an engine for growth in Appalachia, providing much needed jobs to people in impoverished communities. Just how strong is an economy built on coal?
The coal economy is one of “boom and bust.” Similar to resource rich developing countries, the Appalachian regional economy is often constrained by the “resource curse.” Countries with the resource curse often have lower growth rates than countries with fewer natural resources. There are several reasons for this but the one that might apply best to the Appalachian region is revenue volatility. When energy prices are high, the coal economy does well. When energy prices are low the results are otherwise. Workers and business firms come to rely on high coal prices and think of this as the status quo. Instead of diversifying the economy through innovation and entrepreneurship they hope for high coal prices during periods of low prices.
