Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/26402
Authors: 
Buchholz, Wolfgang
Schumacher, Jan
Year of Publication: 
2008
Series/Report no.: 
CESifo working paper 2357
Abstract: 
In this paper, we reconsider the debate on Weitzman's (1998) suggestion to discount the long-run future at the lowest possible rate, referring to Gollier (2004) and Hepburn & Groom (2007). We show that, while Weitzman's use of the present value approach may indeed seem questionable, its outcome, i.e. a discount rate that is declining over time, is nevertheless reasonable, since it can be justified by assuming a plausible degree of risk aversion.
Subjects: 
Discount rates
uncertainty
risk aversion
JEL: 
D40
E43
Q51
Document Type: 
Working Paper

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