Resource title

Discounting the long-distant future: a simple explanation for the Weitzman-Gollier-puzzle

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Resource description

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.

Resource author

Wolfgang Buchholz, Jan Schumacher

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Resource publish date

Resource language

eng

Resource content type

text/html

Resource resource URL

http://hdl.handle.net/10419/26402

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Adapt according to the presented license agreement and reference the original author.