Publication: How should the distant future be discounted when discount rates are uncertain?
Date
2010
Authors
Published Version
Journal Title
Journal ISSN
Volume Title
Publisher
Elsevier BV
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Citation
Gollier, Christian, and Martin L. Weitzman. 2010. “How Should the Distant Future Be Discounted When Discount Rates Are Uncertain?” Economics Letters 107 (3) (June): 350–353. doi:10.1016/j.econlet.2010.03.001.
Research Data
Abstract
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. The puzzle is resolved when agents optimize their consumption plans. The long run discount rate declines over time toward its lowest possible value.
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Keywords
Discount rate, Term structure, Climate change, Cost–benefit analysis
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