Skip to main content
eScholarship
Open Access Publications from the University of California

Steady-state growth in a Hotelling model of resource extraction

  • Author(s): Lin, C.-Y. Cynthia
  • Wagner, Gernot
  • et al.
Abstract

This paper re-examines the Hotelling model of optimal nonrenewable resource extraction in light of stock effects and technological progress. We assume functional forms for cost and demand so that the solution to the Hotelling problem is a steady-state consistent with the empirical observation that the growth rates of market prices have remained zero over a long period of time. We use data on 14 minerals from 1970 to 2004 to estimate the supply and demand functions using SUR and 3SLS and to test the model. We validate the model for 8 of 14 minerals. (c) 2007 Elsevier Inc. All rights reserved.

Many UC-authored scholarly publications are freely available on this site because of the UC Academic Senate's Open Access Policy. Let us know how this access is important for you.

Main Content
Current View