We employ a large dataset of physical inventory data on 21 different commodities for the period 1993-2011 to empirically analyze the behaviour of commodity prices and their volatility as predicted by the theory of storage. We examine two main issues. First, we explore the relationship between...

This paper shows that the use of hyperbolic discounting in environmental regulation can have unfortunate consequences. In a three-period model we demonstrate that a planner who `naively` employs hyperbolic discounting and fails to anticipate problems of dynamic inconsistency, can oversee a...

We show that, in a model with substitutability between capital and resources, the path of sustainable development may be non-smooth, and may exhibit the overshooting property: starting from low levels of capital and resources, the economy may accumulate capital beyond its steady-state level,...

A standard model of the exploitation of a renewable resource by non-cooperating agents is considered. Under the assumption that the resource is sufficiently productive we prove that there exist infinitely many Markov-perfect Nash equilibria (MPNE). Although these equilibria lead to...

We consider here optimal use patterns for renewable resources and address the problem of optimal use of renewable resources under a variety of assumptions both about the nature of the economy in which these resources are embedded and about the objective of that economy. Although we focus here on...

This paper analyzes overlapping-generations models where natural capital is owned by selfish agents. Transfers in favor of young agents reduce the rate of depletion and increase output growth. It is shown that intergenerational transfers may be preferred to laissez-faire by an indefinite...

This chapter focuses on how the lack of property rights in North-South trade of primary resources can distort trade and threaten the sustainablility of development. This issue is examined within a two-region world economy where one region, the North, represents the industrial countries, and the...