Erickson & Associates Juneau, Alaska & Bend, Oregon 1 Hartwick’s Rule and Alaska’s allocation of petroleum rents to consumption and investment, 1977-2010.

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Erickson & Associates Juneau, Alaska & Bend, Oregon 1 Hartwick’s Rule and Alaska’s allocation of petroleum rents to consumption and investment, by Gregg Erickson for 32 nd IAEE Conference Anchorage, Alaska July 28-August 31, 2013

Erickson & Associates Juneau, Alaska & Bend, Oregon 2 Where the oil money went: A 36-year Alaska retrospective

Erickson & Associates Juneau, Alaska & Bend, Oregon 3 “Invest all profits or rents from exhaustible resources in reproducible capital.” Canadian economist John Hartwick (1977)

Erickson & Associates Juneau, Alaska & Bend, Oregon 4 Corollary to Hartwick’s Rule: To the extent rents are diverted to consumption, future generations will suffer.

Erickson & Associates Juneau, Alaska & Bend, Oregon 5 Options: Consumption Investment Real productive assets Intangible productive assets Financial assets Stabilization (rainy day funds) Live off the income (perm. Fund)

Erickson & Associates Juneau, Alaska & Bend, Oregon 6

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