A century of misunderstanding of a key tool in the economics of natural resources

In the past few weeks, oil prices have fallen to record lows. This development was not predicted by the Hotelling rule, an equation proposed in 1931 that remains central to the economics of natural resources today. Economists present the results of a groundbreaking historical survey of documents from Harold Hotelling’s archives. They show that in fact this ‘rule’ was not designed to investigate energy markets.

Source: sciencedaily.com

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