I- NNP and Economic Depreciation of Natural Resource Stocks- II-The Nonrenewable Resources Exploring-Extracting Firm and the R% Rule

John M. Hartwick

Working Papers from Queen's University, Department of Economics

Abstract: If an exhaustible resource stock is viewed as a capital good, one obtains in the Hotelling model that economic depreciation of the stock equals aggregate rent. When extraction costs depend on the stock of resource remaining, depreciation is less than aggregate rent. These results permit us to estimate an extended "capital consumption allowance" for the U.S. economy and to obtain a new NNP value which incorporates the using up of exhaustible resources each year.

Keywords: natural resources; economic models; prices (search for similar items in EconPapers)
Date: 1989

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Persistent link: http://EconPapers.repec.org/RePEc:qed:wpaper:741

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