Equilibrium Commodity Prices with Irreversible Investment and Non - Linear Technologies ∗ Jaime

Abstract

We model the properties of equilibrium spot and futures oil prices in a general equilibrium production economy with two goods. In our model production of the consumption good requires two inputs: the consumption good and a Oil. Oil is produced by wells whose flow rate is costly to adjust. Investment in new Oil wells is costly and irreversible. As a result… (More)

Topics

3 Figures and Tables

Slides referencing similar topics