Fundamental Economics of DepletableEnergy Supply
DownloadIn this paper, we first present and discuss the basic logic underlying all neoclassical economictheories of “optimal” energy supply: maximization of the present value of some stream of economicreturns. We then discuss how the economic theory of optimal resource depletion has evolved sinceHotelling’s classic 1931 article. We also consider the power of the theory to support improved empiricalunderstanding of actual behavior. Our discussion of empirical literature indicates that this work has so farprovided only limited empirical understanding.
Authors
Jeffrey Krautkraemer
Michael Toman
