منابع مشابه
Discounting an uncertain future
The objective of this paper is to determine the socially optimal discount rate for public investment projects that entail costs and benefits in the very long run. We suppose that there is an exogenous process for the growth of consumption per capita, which is stochastic. We first evaluate the determinants of the discount rate for a specific horizon when the representative agent has a recursive ...
متن کاملRationally discounting an uncertain future
J. Doyne Farmer & John Geanakoplos Assessing the relative value of a benefit (or harm) in the future vs. the present is a fundamental problem in economics1. The conventional approach is to discount the future exponentially. This can be motivated by the opportunity cost relative to an investment paying fixed interest2. In contrast, real interest rates vary randomly, so the resulting effective di...
متن کاملDiscounting the Distant Future with Uncertain Rates
Costs and benefits in the distant future have little consequence today when valued with conventional discount rates. This is particularly relevant for assessing policies with effects hundreds of years in the future, such as mitigating the damages from global warming. Many authors and analysts have responded by arguing for the use of lower discount rates over longer horizons, based primarily on ...
متن کاملValuing environmental costs and benefits in an uncertain future: risk aversion and discounting
A central point of debate over environmental policies concerns how future costs and benefits should be assessed. The most commonly used method for assessing the value of future costs and benefits is economic discounting. One often-cited justification for discounting is uncertainty. More specifically, it is risk aversion coupled with the expectation that future prospects are more risky. In this ...
متن کاملSaving for an uncertain future.
T he units that are subject to selection pressure in evolutionary biology are ‘‘strategies,’’ which are conditional actions (for example, do P if X occurs; otherwise do Q). In contrast, the units in economics (they are called ‘‘people’’) select strategies from available menus so as to further their projects and purposes. If evolutionary dynamics involves mindless competition among strategies, e...
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ژورنال
عنوان ژورنال: Journal of Public Economics
سال: 2002
ISSN: 0047-2727
DOI: 10.1016/s0047-2727(01)00079-2