In this lecture, we start to work through a quantitative analysis of the management of privately owned, non-renewable natural resources. We derive the intertemporal equimarginal principle result (which comes from maximizing net present value) and show how follows Hotelling's Rule about the rise in scarcity rent with interest rate over time. We work a numerical example for the 2-period efficient extraction quantities as well.
Whiteboard notes for this lecture can be found at: https://www.dropbox.com/s/gcmv5no5rbp8cz0/LectureD2-2020-11-03-Econ_of_Nonrenewable_Resources-Part_2.pdf?dl=0
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