BUBBLES IN PRICES OF EXHAUSTIBLE RESOURCES

Boyan Jovanovic ()

No 45830, Working Papers from American Association of Wine Economists

Abstract: Aside from the equilibrium that Hotelling (1931) displayed, his model of non-renewable resources also contains a continuum of bubble equilibria. In all the equilibria the price of the resource rises at the rate of interest. In a bubble equilibrium, however, the consumption of the resource peters out, and a positive fraction of the original stock continues to be traded forever. And that may well be happening in the market for high-end Bordeaux wines.

Keywords: Research Methods/ Statistical Methods; Resource/Energy Economics and Policy (search for similar items in EconPapers)
Pages: 31
Date: 2008-11
New Economics Papers: this item is included in nep-cul, nep-ene and nep-env
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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https://ageconsearch.umn.edu/record/45830/files/AAWE_WP32.pdf (application/pdf)

Related works:
Working Paper: Bubbles in Prices of Exhaustible Resources (2008)
Working Paper: Bubbles in Prices of Exhaustible Resources (2007)
Working Paper: Bubbles in Prices of Exhaustible Resources (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aawewp:45830

DOI: 10.22004/ag.econ.45830

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