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Hotelling Rules: Oscillatory Versus Quadratic Trends in Natural Resource Prices

Antonios Antypas, Phoebe Koundouri () and Nikolaos Kourogenis

MPRA Paper from University Library of Munich, Germany

Abstract: A model is introduced for the description of natural resources price paths, which, in contrast to the existing literature, captures non-linear trends by means of a simple trigonometric function. This model is then compared by means of a set of model selection criteria with a quadratic trend model and with a more general one that nests both models. All models are estimated on the price series of eleven major natural resources. In most cases, the trigonometric trend model is selected as the one better fitting the data, providing evidence against the long-run increase of the corresponding natural resource real prices, with interesting policy implications.

Keywords: Oscillatory trend; quadratic trend; Hotelling rule; natural resource prices; model selection (search for similar items in EconPapers)
JEL-codes: O2 Y1 (search for similar items in EconPapers)
Date: 2013-08
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Working Paper: Hotelling Rules: Oscillatory Versus Quadratic Trends in Natural Resource Prices (2013) Downloads
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