On stockpiling natural resources

Charles Mason

Resource and Energy Economics, 2011, vol. 33, issue 2, 398-409

Abstract: Persistent and significant privately held stockpiles of minerals have long been an important empirical regularity in the United States. Such stockpiles would not rationally be held in a traditional Hotelling-style model, though firms could be willing to hold inventories if extraction costs are stock-dependent. More plausibly, if prices are stochastic, and sufficiently volatile, firms have an incentive to hold inventories to smooth production over time.

Keywords: Resource; economics; Stochastic; dynamic; optimization (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (5)

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