Arbeitspapier
Time horizon and the discount rate
We discuss the selection of the socially efficient discount rate for public investment projects that entail costs and benefits in the far distant future. We show that the discount rate should be a decreasing function of time horizon under some specific restrictions on the distribution of uncertain growth and on preferences. We consider a logarithmic random walk for consumption. The benchmark result is that, in the absence of any risk of recession, the yield curve is decreasing if relative risk aversion is decreasing. Relaxing the assumption on the absence of recession requires more restrictions on preferences, as increasing relative prudence.
- Sprache
-
Englisch
- Erschienen in
-
Series: Nota di Lavoro ; No. 88.1999
- Klassifikation
-
Wirtschaft
Criteria for Decision-Making under Risk and Uncertainty
Micro-Based Behavioral Economics: Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making‡
Renewable Resources and Conservation: Water
Renewable Resources and Conservation: Government Policy
- Thema
-
Discounting
uncertain growth
prudence
long term
Soziale Diskontrate
Kosten-Nutzen-Analyse
Umweltökonomik
Theorie
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Gollier, Christian
- Ereignis
-
Veröffentlichung
- (wer)
-
Fondazione Eni Enrico Mattei (FEEM)
- (wo)
-
Milano
- (wann)
-
1999
- Handle
- Letzte Aktualisierung
- 10.03.2025, 11:44 MEZ
Datenpartner
Dieses Objekt wird bereitgestellt von:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
Objekttyp
- Arbeitspapier
Beteiligte
- Gollier, Christian
- Fondazione Eni Enrico Mattei (FEEM)
Entstanden
- 1999
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