Depletion Policies for Oil-Exporting Developing Economies

In modelling the behaviour of oil-exporting countries it is usually assumed that the objective is to maximize the present value of oil revenues evaluated at a vector of market clearing prices. Given the various assumptions on the relevant parameters (initial reserves, demand etc) and the market structure, this exercise gives an extraction policy or, what amounts to the same thing, a vector of equilbrium prices . A substantial number of numerical exercise s have been produced along these lines.

By: Y. Stournaras