TRACKING THE GOVERNMENT SECTOR IN A NATURAL RESOURCE-BASED ECONOMY

In this paper, we describe the modeling of a resource-dependent economy, namely, Southeast Alaska, in monitoring the impact of federal, state and local government taxing and spending activities on the region. An important part of the modeling effort is construction of a readily accessible regional database for estimating critical economic relationships and variables that provide a baseline forecast series for the region. The Alaska Interactive Policy Analysis Simulation System (IPASS) makes use of the database in assessing the economic impacts of alternative resource management policies on state and local governments. IPASS is a computer-based, user-interactive economic forecasting and simulation system. The basic system is divided into eight modules: investment; final demand; production; regional export; population; labor force; employment; and primary inputs with government being the ninth module. It provides the quantitative framework for measuring and monitoring changes in regional economic activity and, also, for differentiating among the causal factors accounting for these changes. The individual modules form the IPASS shell that makes possible assessment of the effects of specific government activity on each industry and sector in the region's economy and, in turn, the effects of specific industry activity on each level and function of government.