Exploration and Exhaustible Resources: The Microfoundations of Aggregate Models

Swierzbinski, Joseph; Mendelssohn, Robert

doi:10.2307/2526556

Cited by 64 publications

(22 citation statements)

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“…C(X, E, t) depicts the cost of extracting E tons at time t. Solow and Wan [21] as well as Swierzbinski and Mendelsohn [23] discuss procedures for aggregating across multiple deposits of an exhaustible resource with different extraction costs. They show that in the absence of exploration, if firms extract first from the cheapest deposits and there are constant returns to scale in extraction, then an aggregate extraction cost function can be defined and indexed by the amount of cumulative extraction.…”

mentioning

confidence: 99%

Steady-state growth in a Hotelling model of resource extraction

Lin

Wagner

2007

Journal of Environmental Economics and Management

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confidence: 99%

Steady-state growth in a Hotelling model of resource extraction

Lin

Wagner

2007

Journal of Environmental Economics and Management

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“…Hartman and Mutmansky (2002), Pindyck (1978), Deshmukh and Pliska (1980), Devarajan and Fisher (1982), Swierzbinski and Mendelsohn (1989), Neal (2007), Radetzki (2008), Cairns (1990) Information Costs Technology Exploration success Information Technology Extraction Extraction quantity Hotelling (1931), Gray (1914), Dasgupta and Heal (1974), Solow and Wan (1976), Schulze (1974), Hanson (1980), Hartman and Mutmansky (2002), Krautkraemer (1988Krautkraemer ( , 1989Krautkraemer ( , 1998, Stiglitz (1993), Slade 1982, Heal (1976 Stiglitz (1993), Hotelling (1931), Bodie et al (2002), Bhagwati and Johnson (1961), Brecher and Bhagwati (1981) Interest rate Storage Storage quantity Fama and French (1987), Telser (1958) …”

Section: Hypothesesmentioning

confidence: 99%

Determinants of the Price of High-Tech Metals: An Event Study

et al. 2014

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The growing demand for high-tech products has resulted in strong growth in demand for certain minor metals. In combination with production concentrated in China, this caused strong and unpredicted price movements in recent years. As a result, manufacturing companies have to cope with additional risks. However, the detailed reasons for the price development are only partially understood. Therefore, we analyzed empirically which determinants can be assigned to price movements and performed an event study on the hightech metals neodymium, indium, and gallium. Based on our dataset of news items, we were able to find coinciding events to almost 90% of all price jumps (recall). We showed that if any information about these events occurred with a probability of over 50% there would also be a price jump within 10 days (precision). However, the classical set of price determinants has to be extended for these specific markets, as we found unorthodox factors like holidays or weather that may be indicators for price movements. Therefore, we hope that our study supports industry for instance in performing more informed short-term planning of metals purchasing based on information about specific events.

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“…However, Sinn's approach is simplified by the removal of extraction costs. Also, a stock dependent extraction cost function with the properties assumed in Sinn (2008) might be misspecified according to Livernois and Uhler (1987), Livernois (1987), and Swierzbinski and Mendelsohn (1989) if it is used in extraction models where the size of the resource stock depends on discoveries 5 . All other assumptions remain valid.…”

Section: Assumptionsmentioning

confidence: 99%

Fossil Fuel Extraction and Climate Policy: A Review of the Green Paradox with Endogenous Resource Exploration

Österle¹

2012

SSRN Journal

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SummaryPolicies aimed at reducing emissions from fossil fuels may increase climate damages. This "Green Paradox" emerges if resource owners increase near-term extraction in fear of stricter future policy measures. Hans-Werner Sinn (2008) showed that the paradox occurs when increasing resource taxes are applied within a basic exhaustible resource model. This article highlights that the emergence of the Green Paradox within this framework relies on the nonexistence of a backstop technology and fixed fossil fuel resources. In doing this, it initially presents a basic exhaustible resource model which includes a backstop technology and shows that the implementation of a specific sales tax path is effective in mitigating global warming. Secondly, it considers the case of costly exploration activities being introduced within the basic model and accounts for the real world condition that the location of fossil fuels is unknown. Under this condition, an increasing cash flow tax is effective in dealing with climate change if policy makers commit to a high initial tax level and to a specific range of growth rates. (2008) showed that the paradox occurs when increasing resource taxes are applied within a basic exhaustible resource model. This article highlights that the emergence of the Green Paradox within this framework relies on the non-existence of a backstop technology and fixed fossil fuel resources. In doing this, it initially presents a basic exhaustible resource model which includes a backstop technology and shows that the implementation of a specific sales tax path is effective in mitigating global warming. Secondly, it considers the case of costly exploration activities being introduced within the basic model and accounts for the real world condition that the location of fossil fuels is unknown. Under this condition, an increasing cash flow tax is effective in dealing with climate change if policy makers commit to a high initial tax level and to a specific range of growth rates. KeywordsJel Classification: Q31, Q54, Q58, H23, H32

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Exploration and Exhaustible Resources: The Microfoundations of Aggregate Models

Cited by 64 publications

References 0 publications

Steady-state growth in a Hotelling model of resource extraction

Steady-state growth in a Hotelling model of resource extraction

Determinants of the Price of High-Tech Metals: An Event Study

Fossil Fuel Extraction and Climate Policy: A Review of the Green Paradox with Endogenous Resource Exploration

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