THE 2012 LAWRENCE R. KLEIN LECTURE: BUBBLES IN PRICES OF EXHAUSTIBLE RESOURCES
This article proposes a test for the presence of a bubble in the price of an exhaustible resource. A bubble is accompanied by a rise in the storage‐to‐consumption ratio: Consumption peters out, and a fraction of the original stock is held forever. The test suggests there is a bubble in the price of...
Saved in:
| Published in: | International economic review (Philadelphia) 2013-02, Vol.54 (1), p.1-34 |
|---|---|
| Main Author: | |
| Format: | Article |
| Language: | eng |
| Online Access: | Get full text |
| Tags: |
Add Tag
No Tags, Be the first to tag this record!
|
| Summary: | This article proposes a test for the presence of a bubble in the price of an exhaustible resource. A bubble is accompanied by a rise in the storage‐to‐consumption ratio: Consumption peters out, and a fraction of the original stock is held forever. The test suggests there is a bubble in the price of oil and in the market for high‐end Bordeaux wines, but other explanations are also possible. A bubble reduces welfare regardless of whether there are other stores of value, particularly fiat money. |
|---|---|
| ISSN: | 0020-6598 1468-2354 |