Are Net Discount Ratios Stationary ? : The Implications For Present Value Calculations

  • Joseph H. Haslag Michael Nieswiadomy D. J. Slottje
  • Published 2007
This article analyzes the relationship between real interest rates and real growth rates in wages. The stationarity of these time series has been discussed in the literature. However, since the net discount ratio, (1 + g,)/(l + r), is a nonlinear transformation, it is not necessarily stationary even if the interest rate and growth rate in wages series are… CONTINUE READING