Bubbles in prices of exhaustible resources

This article proposes a test for the presence of a bubble in the price of an exhaustible resource. A bubble is accompanied by a rise in the storage-to-consumption ratio: Consumption peters out, and a fraction of the original stock is held forever. The test suggests there is a bubble in the price of oil and in the market for high-end Bordeaux wines, but other explanations are also possible. A bubble reduces welfare regardless of whether there are other stores of value, particularly fiat money.