Nonrenewable resources
Slides [link]Lecture 1
Managing nonrenewable resources
Required Reading
- KO chapter 6
Response questions
- What is the Hotelling Rule, in your own words?
Key Points
- Exhaustible resources rarely exhausted
- But fact that they are not replaceable imposes an intertemporal externality.
- The Hotelling Rule describes the optimal extraction path in light of this.
- Understand when the market extraction path will and won't be optimal.