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Optimal Resource Rent

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  • Rustam Jamilov

    ()

Abstract

This paper develops the first systematic attempt to model and empirically estimate the concept of optimal resource renting. Optimal rent is found to be positively affected by increases in the recession buffer and resource endowment, and negatively affected by the opportunity cost of hoarding. The model is then tested empirically on Norway, an oil-rich state, and actual renting is found to be systematically diverging from the optimal rent series. At least a third of the variation in actual renting is always left unexplained by the economic variables of the model, and should be attributed to the institutional and political factors that lie beyond the scope of our analysis.

Suggested Citation

  • Rustam Jamilov, 2013. "Optimal Resource Rent," William Davidson Institute Working Papers Series wp1046, William Davidson Institute at the University of Michigan.
  • Handle: RePEc:wdi:papers:2013-1046
    as

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    File URL: http://deepblue.lib.umich.edu/bitstream/2027.42/133064/1/wp1046.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    Rent-Seeking; Resources Policy; Public Finance;

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • L71 - Industrial Organization - - Industry Studies: Primary Products and Construction - - - Mining, Extraction, and Refining: Hydrocarbon Fuels
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements

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