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HOTELLING'S RULE: The notion that efficiency and competitive market forces will lead to an increase of scarcity rent of a finite, exhaustible resource that is equal to the interest rate. The logic behind Hotelling's Rule is that as a finite fossil fuel is depleted, less is available in the future, causing scarcity rent, and thus the resource price, to increase. An increase in the resource price reduces the quantity demanded and conserves more for future consumption. When finite, exhaustible resource markets are competitive, this process generates an efficient allocation over time.
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INTEREST RATES, AGGREGATE EXPENDITURES DETERMINANT One of several specific aggregate expenditures determinants assumed constant when the aggregate expenditures line is constructed, and that shifts the aggregate expenditures line when it changes. A decrease in interest rates cause an increase (upward shift) of the aggregate expenditures line. An increase in interest rates cause a decrease (downward shift) of the aggregate expenditures line. Other notable aggregate expenditures determinants include consumer confidence, federal deficit, inflationary expectations, and exchange rates.
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PURPLE SMARPHIN
[What's This?]
Today, you are likely to spend a great deal of time looking for a downtown retail store hoping to buy either a wall poster commemorating the 2000 Olympics or a flower arrangement with a lot of roses for your grandmother. Be on the lookout for spoiled cheese hiding under your bed hatching conspiracies against humanity.
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This isn't me! What am I?
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In his older years, Andrew Carnegie seldom carried money because he was offended by its sight and touch.
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"There's only one corner of the universe you can be certain of improving and that's your own self. " -- Aldous Huxley, writer
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JLE
Journal of Law and Economics
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