Exhaustible natural resources, normal prices and intertemporal equilibrium
AbstractThis paper proposes an extension of the classical theory of normal prices to an n-commodity economy with exhaustible natural resources. The central idea is developed by two analytical steps. Firstly, it is assumed that a given flow of an exhaustible resource in short supply is combined with the coexistence of two methods of production using that resource. Sraffa’s equations are reinterpreted by adopting the concept of effectual supply of natural resources and avoiding the assumption of perfect foresight. Secondly, in force of the Hotelling rule, some limitations are imposed to the dynamics of normal prices and, by implication, to technical and structural change. A comparison, between such approach and the notion of intertemporal equilibrium with natural resources, introduces the central argument. The final part of the paper presents a critical assessment of recent works in this area. The conclusions are focused on methodological issues. Final version of this working paper: S. Parrinello, “The Notion of Effectual Supply and the Theory of Normal Prices with Exhaustible Natural Resources”, Economic Systems Research, Vol. 16, No. 3, September 2004.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 30827.
Date of creation: Jun 2003
Date of revision:
Exhaustible resources; normal prices; Sraffian analysis; Hotelling rule;
Find related papers by JEL classification:
- Q32 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Exhaustible Resources and Economic Development
- D57 - Microeconomics - - General Equilibrium and Disequilibrium - - - Input-Output Tables and Analysis
- B50 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - General
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Kurz,Heinz D. & Salvadori,Neri, 1995.
"Theory of Production,"
Cambridge University Press, number 9780521443258, December.
- Christian Bidard & Guido Erreygers, 2001. "The Corn–Guano Model," Metroeconomica, Wiley Blackwell, vol. 52(3), pages 243-253, 08.
- Heinz Kurz & Neri Salvadori, 1997. "Exhaustible Resources in a Dynamic Input-Output Model with 'Classical' Features," Economic Systems Research, Taylor & Francis Journals, vol. 9(3), pages 235-252.
- Sergio Parrinello, 2004. "The Notion of Effectual Supply and the Theory of Normal Prices with Exhaustible Natural Resources," Economic Systems Research, Taylor & Francis Journals, vol. 16(3), pages 311-322.
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