The spline-based models are widely used in practice to estimate the term structure of interest rates from a set of observed coupon-bond prices. The most popular method can be traced back to McCulloch (1971). Assuming that the price of a bond is equal to the present value of its future coupon payments and redemption, cash flows are regressed on a set of basis functions to estimate discount funct...

This paper considers the issue of discounting in relation to the appraisal of very long-term social projects. This is an increasingly important matter given the growing concerns over the environmental and safety impacts of many projects on future generations. Standard discounting practice trivialises the welfare impacts of projected costs and benefits on future populations, so a credible altern...

It is not immediately clear how to discount distant-future events, like climate change, when the distant-future discount rate itself is uncertain. The so-called “WeitzmanGollier puzzle” is the fact that two seemingly symmetric and equally plausible ways of dealing with uncertain future discount rates appear to give diametrically opposed results with the opposite policy implications. We explain ...

In this paper we propose a multivariate discount weighted regression technique to give a tractable solution to the problem of variance estimation and forecasting for the multivariate local level model. We give the correspondence between discount regression and matrix normal dynamic linear models and we show that the local level model can be treated with discount regression techniques. We illust...

A discounted-sum automaton (NDA) is a nondeterministic finite automaton with edge weights, valuing a run by the discounted sum of visited edge weights. More precisely, the weight in the i-th position of the run is divided by λ, where the discount factor λ is a fixed rational number greater than 1. The value of a word is the minimal value of the automaton runs on it. Discounted summation is a co...

Poor individuals often exhibit higher discount rates than richer individuals, and negative income shocks have been linked to increases in discounting. However, it remains unknown whether this effect is causal, and whether is due to beliefs or preferences: increases in discount rates in poverty or after negative income shocks could either be due to (beliefs about) more severe environmental const...