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 Economyfeatures 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.

PART I: INTRODUCTION1. Tipping Our Hats to the Ten-Gallon Economy; Pia M.Orrenius, Jesús Cañas, Michael WeissPART II: PUBLIC POLICY AND BUSINESSCLIMATE2. Increasing Jobs and Income from Work: The Role and Limitations ofPublic Policy; David Neumark3. Why Texas Grows Faster: The Role of SmallerGovernment; Jason Saving4. The Shortcomings of the Texas Margin Tax; Alan D.ViardPART III: HUMAN CAPITAL AND LABOR MARKETS5. Texas' EducationChallenge: A Demographic Dividend or Bust?; Marta Tienda6. Oil Boom LowersHuman Capital Investment in Texas; Anil Kumar7. Employment Growth and LaborMarket Polarization in the U.S. and Texas; Melissa LoPalo, Pia M.OrreniusPART IV: INDUSTRY AND EXPORTS8. Texas Real Estate: From the1980s' Oil Bust to the Shale Oil Boom; John V. Duca, Michael Weiss, ElizabethOrgan9. The Evolution of Texas Banking; Kory Killgo and Kenneth J.Robinson10. The Impact of Changing Energy Prices on the Texas Economy; MineK. Yücel, Michael Plante, Amy Jordan, Nicole Lake11. Texas ComparativeAdvantage and Manufacturing Exports; Jesús Cañas, Luis Bernardo Torres RuizChristina EnglishPART V: BORDER AND ECONOMIC DEVELOPMENT12. So Close toMexico: Economic Spillovers Along the Texas-Mexico Border; Roberto CoronadoMarycruz De León, Eduardo Saucedo13. Border Economic Recovery Lags Rest ofState; Keith R. Phillips and Christopher Slijk14. Las Colonias Along theTexas-Mexico Border; Jordana Barton, Elizabeth Sobel Blum, Emily RyderPerlmeter, Raquel R. Márquez