In this lecture, we introduce economic models for managing private, nonrenewable natural resources (such as oil). We start the lecture with the general picture of viewing natural resource allocations as a kind of capital asset portfolio management problem. We then outline the qualitative features we would expect in a quantitative analysis of management of a private, non-renewable resource. This allows us to discuss "scarcity rent" (marginal user cost), price paths of nonrenewable resources, and Hotelling's Rule. We will take on a more mathematical treatment of these topics in the next lecture.
Whiteboard notes for this lecture can be found at: https://www.dropbox.com/s/e4u2wbmzmdcqrzy/LectureD1-2020-10-27-Econ_of_Nonrenewable_Resources-Part_1.pdf?dl=0
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