Bubbles in Prices of Exhaustible Resources
Aside from the equilibrium that Hotelling (1931) displayed, his model of non-renewable resources also contains a continuum of bubble equilibria. In all the equilibria the price of the resource rises at the rate of interest. In a bubble equilibrium, however, the consumption of the resource peters out, and a positive fraction of the original stock continues to trade forever. And that may well be happening in the market for high-end Bordeaux wines.
Published: Bubbles in Prices of Exhaustible Resources Boyan Jovanovic New York University - Department of Economics February 2013 International Economic Review, Vol. 54, Issue 1, pp. 1-34, 2013 DOI: 10.1111/iere.12000