Arbeitspapier
How should the distant future be discounted when discount rates are uncertain?
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 Weitzman-Gollier 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 how the Weitzman-Gollier puzzle is resolved. When agents optimize their consumption plans and probabilities are adjusted for risk, the two approaches are identical. What we would wish a reader to take away from this paper is the bottom-line message that the appropriate long run discount rate declines over time toward its lowest possible value.
- Sprache
-
Englisch
- Erschienen in
-
Series: CESifo Working Paper ; No. 2863
- Klassifikation
-
Wirtschaft
Asset Pricing; Trading Volume; Bond Interest Rates
Interest Rates: Determination, Term Structure, and Effects
Valuation of Environmental Effects
- Thema
-
discount rate
term structure
climate change
cost-benefit analysis
Soziale Diskontrate
Abzinsung
Zinsstruktur
Klimaveränderung
Klimaschutz
Kosten-Nutzen-Analyse
Theorie
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Gollier, Christian
Weitzman, Martin L.
- Ereignis
-
Veröffentlichung
- (wer)
-
Center for Economic Studies and ifo Institute (CESifo)
- (wo)
-
Munich
- (wann)
-
2009
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:42 MEZ
Datenpartner
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Objekttyp
- Arbeitspapier
Beteiligte
- Gollier, Christian
- Weitzman, Martin L.
- Center for Economic Studies and ifo Institute (CESifo)
Entstanden
- 2009
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