TY  - JOUR
AU  - Jovanovic,Boyan
TI  - Bubbles in Prices of Exhaustible Resources
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 13320
PY  - 2007
Y2  - August 2007
UR  - http://www.nber.org/papers/w13320
L1  - http://www.nber.org/papers/w13320.pdf
N1  - Author contact info:
Boyan Jovanovic
New York University
Department of Economics
19 W. 4th Street, 6th Floor
New York, NY  10012
Tel: 212/998-8953
Fax: 212/995-4186
E-Mail: Boyan.Jovanovic@nyu.edu
AB  - 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.
ER  -