How Much is a Nonearning Asset with No Current Capital Gains Worth?

Throughout his career, Ngo Van Long made substantial contributions to applied economic theory. With nearly 200 articles and 8 books to his credit, his contributions span the fields of international trade, industrial organization, public finance, natural resources, and environmental economics. This paper contributes to the significant literature which developed after Long (J Econ Theory 10:42–53, 1975), an early contribution to exhaustible resource theory published in the year Long received his PhD. He deduced the optimal extraction path of an exhaustible resource when there is a risk the resource will be nationalized at an unknown time. After surveying the related literature, we deduce the implications of Long’s dynamics when the random event would raise rather than lower the competitive price of the asset. We illustrate with 3 applications: an investment project which a court might allow to commence; land with regulatory restrictions preventing development which might be rezoned for an income-generating use; and a futures contract on a currency which might be revalued before the contract expires.