Oil Dependence and Economic Activity

Setting the stage Let's quickly look at where this oil decline has left the state What about Alaska's important economic base? Why have some states recovered? Aggregate relationship between oil prices and employment Where does this leave us? What about diversification? General takeaways Steps forward It is important to separate revenue diversification from economic diversification. • The recent decision to use the earnings reserve to fund a portion of government should make the state revenues more resilient to future oil price declines. • The Alaska disconnect will eventually need to be addressed. >> 592 Mouhcine Guettabi, PhD Oil dependence and economic activity

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