20 votes

Is Malthusian theory of population growth being realized?

The annual growth rate of the global population has been in decline since about 1967 (five decades ago). The absolute annual growth peaked in 1987 (three decades ago). Malthusians claim that: ...
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  • 7,992
14 votes

The supply and demand of Virtual Products

The book Information Rules by Google Chief Economist Hal Varian (with Carl Shapiro) deals with many issues raised by the particular features of the digital economy. In general, he finds you don't need ...
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12 votes
Accepted

What is the reasoning behind the sharp fall of oil prices starting in mid 2014?

My understanding of the recent drop in oil price is due to recent changes in US drilling. They are now the worlds largest oil producer. This article by the economist does a good job explaining. My ...
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  • 3,721
8 votes

Is Malthusian theory of population growth being realized?

The Malthusian crisis has two parts. The first is exponential population growth. As others have noted, there is a trend for declining fertility once countries achieve an advanced state of development. ...
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  • 16.6k
8 votes

The supply and demand of Virtual Products

Your broad idea is right. Since the marginal cost of reproducing digital goods is essentially zero, there is a sense in which is appears optimal to give the good to any consumer who has a positive ...
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  • 16.6k
7 votes
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How successful will OPEC's predatory dumping strategy be?

This is the cost curve of oil production (North American shale at $65): Source And this is the cost curve of major American projects: Source While "Citi's Ed Morse highlighted this chart, showing ...
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6 votes

What oil price will minimise new resource extraction?

An oil price of 0 will make any extraction of oil unprofitable and hence imply no further oil extraction. You should think about how prices carry signals. A low oil price (even if not 0) carries the ...
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  • 10.4k
5 votes

Is Malthusian theory of population growth being realized?

The other excellent answers provided data - mine will provide a simple look into at what stage we are, if Malthusian Theory holds. I replicate here the first graph of the OP: For the graph to be ...
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5 votes

Is Malthusian theory of population growth being realized?

I think the answer of @EnergyNumbers covers most of the important points but I would like to emphasize something else. When setting up a model you should not give the same weights to data from 500 ...
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  • 26.1k
5 votes

Is the use/consumption of natural resources considered an externality per se?

Use or consumption of natural resources is not in mainstream economics considered as an externality per se. First of all the quote from Mankiw is probably from undergraduate textbook and taken out of ...
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  • 41.6k
4 votes
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Constant Returns in a Production Function $\frac{Y}{L}=\left(\frac{K}{L}\right)^{\alpha}\left(\frac{R}{L}\right)^{\beta}$ ($R$ = Resource)

The purpose of the paper under consideration is to examine/show the "investment rule" that leads to "intergenerational equity", which with constant population translates into constant consumption. ...
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4 votes
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Australia and Saudi Arabia - Structural Similarities

It's an analogy. The Saudi economy as an analogy for the Australian economy. Like any other analogy, you can stretch it to a certain point, but then it breaks. The article sets out the ways in which ...
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  • 7,992
4 votes

What oil price will minimise new resource extraction?

What would be economically most efficient is that for the price of oil to reflect all its costs, including all the pollution costs. A price that high would destroy a lot of demand, and incentivise all ...
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  • 7,992
4 votes

What would happen to the world GDP if we run out of minerals to mine but not of sources of energy?

You're correct that just because 1% of the economy is in mineral extraction, doesn't mean that stopping it would reduce global GDP by 1%. Similarly, roughly 10% of global GDP is on energy expenditure, ...
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  • 7,992
4 votes
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What is the economic nature of water?

Most of the terms you mention are not mutually exclusive. Commodity is not a specialized term and it just denotes some (mostly) fungible economic good (see here or here). So water is a commodity. ...
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3 votes
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If Y=K+C, why the value of a marginal unit of capital is the same of the value of a marginal unit of output?

This is a single-good model, that is, output is of one good which can be either consumed or added to capital. The dynamic optimisation problem is to maximise the discounted present value of utility, ...
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  • 6,718
3 votes

How helpful is Hotelling's Rule in determining the price of oil?

It would be easy enough to subject the question to simple quantitative analysis - get the time-series of historical oil prices and away we go. Or, we can take a quick qualitative approach and get the ...
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  • 7,992
3 votes

What is the impact of fracking on oil prices?

over the past few months, the oil harvested from fracking had come onto the market reducing the price of gas. Obviously, this makes no sense insofar as the oil harvested from fracking displaces oil ...
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3 votes

What is the reasoning behind the sharp fall of oil prices starting in mid 2014?

Considering oil as a commodity that does not expire and can be relatively easily stored, I believe the reason for the recent price drop of oil is much more political than what it has to do with ...
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  • 141
3 votes

What is the reasoning behind the sharp fall of oil prices starting in mid 2014?

The basic factors in the decline of petroleum prices is the increased production in the US in the North Dakota and Texas shale oil fields as a result of the use of hydraulic fracturing in conjunction ...
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3 votes

What is the reasoning behind the sharp fall of oil prices starting in mid 2014?

I'll go ahead and admit that I do not have any empirical evidence, and this is more of factor to consider when evaluating future movement in the oil market. As oil prices drop, some US oil producers ...
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3 votes
Accepted

What oil price will minimise new resource extraction?

Let us just assume, without any loss of generality, that it is OPEC nations who can produce oil most cheaply. That is, the cost per barrel for all OPEC nations is homogeneous and is lower than the ...
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  • 2,871
3 votes
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Oil as a function of GDP

I don't think it's any more complicated than looking at the ratio of global oil consumption and global Gross Domestic Product. The OECD, World Bank, IMF and others produce estimates of each. There is ...
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  • 7,992
3 votes

The supply and demand of Virtual Products

Someone still has to build the app or ebook. In other words, these products are characterized by large fixed costs of production and low variable costs. The marginal cost is positive because there ...
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  • 31
3 votes
Accepted

What is the relationship between the disciplines of Economics and Economic Geography?

I see both Economic Geography and Ecological Economics as different. Economic Geography is the study of the determinants and effects of the spatial distribution of economic activity. Economic ...
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  • 6,652
3 votes
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Subsidies as incentives

The claim is definitely not trivial, otherwise we would not observe frequent draughts due to government subsidies (like drought in California that is at least partially caused by bad water and farming ...
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  • 41.6k
3 votes
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What would Russia gain economically speaking if it conquered Ukraine?

Would Russia get richer or economically more powerful if it managed to annex ukraine? Likely not. Countries generally do not get rich by having a lot of natural resources. In fact it is often the ...
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  • 41.6k
2 votes

What is the impact of fracking on oil prices?

This started as a comment on Stephen Landsburg's answer but was getting too long for the comment format. When a new supply of oil is discovered, it increases the potential new supply. This will ...
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