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Oil Prices Are Still Too High

Predictions that the constant-dollar price of oil will rise again to surpass and remain above the all-time peaks reached in 1981 rest on strong logical premises. The truism that natural resources are finite unites with the paradigms of Malthus, Ricardo, and Hotelling to imply that the terms of trade will forever flow in favor of resource owners, particularly the owners of depletable resources.

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Energy Specializations: Petroleum – Markets and Prices for Crude Oil and Products; Petroleum – Policy and Regulation

JEL Codes: Q41: Energy: Demand and Supply; Prices, Q40: Energy: General, Q35: Hydrocarbon Resources, Q31: Nonrenewable Resources and Conservation: Demand and Supply; Prices

Keywords: Oil prices, Depletable resources, Hotelling, Malthus, Ricardo

DOI: 10.5547/ISSN0195-6574-EJ-Vol6-No1-2

Published in Volume 6, Number 1 of the bi-monthly journal of the IAEE's Energy Economics Education Foundation.


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