Interest Rate and Output Price Uncertainty and Industry Equilibrium for Nonrenewable Resource Extracting Firms

David Yeung and John M. Hartwick

No 275200, Queen's Institute for Economic Research Discussion Papers from Queen's University - Department of Economics

Abstract: We establish convexity of a nonrenewable resource extracting agent's value function in the future interest rate, a random variable. A preference by the agent for future interest rate uncertainty follows. A rational expectations, m identical firm industry equilibrium is characterized and the links between interest rate uncertainty and output price uncertainty are investigated.

Keywords: Demand and Price Analysis; Financial Economics (search for similar items in EconPapers)
Pages: 23
Date: 1985
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:queddp:275200

DOI: 10.22004/ag.econ.275200

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