Increasing Extraction Costs and Resource Prices: Some Further Results
AbstractThere has been considerable interest concerning the form of the efficiency price path when extraction costs increase over time. This paper presents a reasonable condition on the distribution of resources among cost grades which implies that the efficiency path is concave, with a relatively high initial price but a declining growth of price, and that the scarcity rent path decreases monotonically. The average scarcity rent path decreases monotonically. The average scarcity rent is also explicitly determined. Finally, a measure of resource scarcity is obtained on the basis of the current efficient competitive price of the resource.
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Bibliographic InfoArticle provided by The RAND Corporation in its journal Bell Journal of Economics.
Volume (Year): 11 (1980)
Issue (Month): 1 (Spring)
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Web page: http://www.rje.org
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- James Roumasset & Kimberly Burnett & Hua Wang, 2007. "Is China’s Growth Sustainable?," Working Papers 200723, University of Hawaii at Manoa, Department of Economics.
- Ronald H. Schmidt, 1988. "Hotelling's rule repealed? An examination of exhaustible resource pricing," Economic Review, Federal Reserve Bank of San Francisco, issue Fall, pages 41-54.
- Halvorsen, Robert & Smith, Tim R, 1984. "On Measuring Natural Resource Scarcity," Journal of Political Economy, University of Chicago Press, vol. 92(5), pages 954-64, October.
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