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Economic Study of Problems of Depletion of Several Interrelated Non-renewable Resources

Author

Listed:
  • R. García-Rubio

    (University of Salamanca)

  • L. Bayón

    (University of Oviedo)

  • J. A. Otero

    (University of Oviedo)

  • P. M. Suárez

    (University of Oviedo)

  • C. Tasis

    (University of Oviedo)

Abstract

In this paper we generalize the classic problem of the economic study of the extraction of non-renewable resources. The most notable generalizations presented here are the presence of constraints on the depletion rate, multiple resources and variable prices and costs over time. To solve the problem, we first use the theory of optimal control combined with a modification of the classic shooting method and an algorithm inspired by the cyclic coordinate descent algorithm. Numerous examples are presented to illustrate the possibilities the method offers.

Suggested Citation

  • R. García-Rubio & L. Bayón & J. A. Otero & P. M. Suárez & C. Tasis, 2016. "Economic Study of Problems of Depletion of Several Interrelated Non-renewable Resources," Computational Economics, Springer;Society for Computational Economics, vol. 48(3), pages 503-521, October.
    • Handle: RePEc:kap:compec:v:48:y:2016:i:3:d:10.1007_s10614-015-9511-x
    DOI: 10.1007/s10614-015-9511-x
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    References listed on IDEAS

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    1. Harold Hotelling, 1931. "The Economics of Exhaustible Resources," Journal of Political Economy, University of Chicago Press, vol. 39, pages 137-137.
    2. Dorfman, Robert, 1969. "An Economic Interpretation of Optimal Control Theory," American Economic Review, American Economic Association, vol. 59(5), pages 817-831, December.
    3. Miguel-Angel Martín & Agustín Herranz, 2004. "Human capital and economic growth in Spanish regions," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 10(4), pages 257-264, November.
    4. Lewis Cecil Gray, 1914. "Rent under the Assumption of Exhaustibility," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 28(3), pages 466-489.
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