Should we Discount the Far-Distant Future at its Lowest Possible Rate?

Article, Research, Preprint OPEN
Gollier, Christian;
  • Publisher: Kiel: Kiel Institute for the World Economy (IfW)
  • Journal: Economics: The Open-Access, Open-Assessment E-Journal,volume 3,pages1-14
  • Related identifiers: doi: 10.5018/economics-ejournal.ja.2009-25
  • Subject: Discount rate | développement durable | E43 | Optimales Wachstum | term structure | Discount rate,term structure,certainty equivalent rate,Ramsey rule,sustainable development | G12 | Q51 | Ramsey rule | sustainable development | Zinsstruktur | DISCOUNT RATE;TERM STRUCTURE;CERTAINTY EQUIVALENT RATE;RAMSEY RULE;SUSTAINABLE DEVELOPMENT | Soziale Diskontrate | certainty equivalent rate | Nachhaltige Entwicklung | Theorie
    • jel: jel:E43 | jel:G12 | jel:Q51
      ddc: ddc:330

In this paper, we elaborate on an idea initially developed by Weitzman (1998) that justifies taking the lowest possible discount rate for far-distant future cash flows. His argument relies on the arbitrary assumption that when the future rate of return of capital (RRC) ... View more
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