Interest Rate and Output Price Uncertainty and Industry Equilibrium for Nonrenewable Resource Extracting Firms

We establish convexity of a nonrenewable resource extracting agent's value function in the future interest rate, a random variable. A preference by the agent for future interest rate uncertainty follows. A rational expectations, m identical firm industry equilibrium is characterized and the links between interest rate uncertainty and output price uncertainty are investigated.


Issue Date:
1985
Publication Type:
Working or Discussion Paper
DOI and Other Identifiers:
Record Identifier:
https://ageconsearch.umn.edu/record/275200
Language:
English
Total Pages:
23
Series Statement:
IER No. 599




 Record created 2018-07-19, last modified 2020-10-28

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