Rational Expectations with Market Power - The Paradox of the Disadvantageous Tariff on Oil
The theoretical analysis of exaustible resources has to date largely ignored the "geo-political realities" which preoccupy policy makers and has concentrated on the logically prior problem of analyzing market equilibrium in an autarkic economy. Autarky is a useful framework for the study of competitive equilibrium but is ill-suited to analyze the taxation of those exhaustible resources which are traded between large sovereign nationan-states.
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