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Investment and resource policy under a modified Hotelling rule

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  • Bazhanov, Andrei

Abstract

An extensive literature shows the importance of investment policy for sustainability of resource-based economies. The approaches of these studies are mostly based on theoretical results that examine the role of investments in a competitive optimizing economy. This paper extends some of these results by considering the dependence of current consumption change on investment under distortions causing modification of the standard Hotelling rule (HR). This extension implies that resource policy in the presence of the distortions can be more important for sustainability than under the standard HR. The examples of the analysis for distorted resource-based economies are provided.

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File URL: http://mpra.ub.uni-muenchen.de/32428/
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File URL: http://mpra.ub.uni-muenchen.de/34656/
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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 32428.

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Date of creation: 04 Jul 2011
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Handle: RePEc:pra:mprapa:32428

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Keywords: nonrenewable resource; sustainable development; resource policy; genuine investment; Hotelling rule;

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  18. Andrei Bazhanov, 2012. "A Closed-Form Solution to Stollery’s Problem with Damage in Utility," Computational Economics, Society for Computational Economics, vol. 39(4), pages 365-386, April.
  19. Proops, John L. R. & Atkinson, Giles & Schlotheim, Burkhard Frhr. v. & Simon, Sandrine, 1999. "International trade and the sustainability footprint: a practical criterion for its assessment," Ecological Economics, Elsevier, vol. 28(1), pages 75-97, January.
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  24. Bazhanov, Andrei, 2008. "Sustainable growth: The extraction-saving relationship," MPRA Paper 9911, University Library of Munich, Germany.
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