Discounting an uncertain future

@inproceedings{Gollier2002DiscountingAU,
  title={Discounting an uncertain future},
  author={Christian Gollier},
  year={2002}
}
The objective of this paper is to determine the socially optimal discount rate for public investment projects that entail costs and benefits in the very long run. We suppose that there is an exogenous process for the growth of consumption per capita, which is stochastic. We first evaluate the determinants of the discount rate for a specific horizon when the representative agent has a recursive utility. We then explore the influence of the time horizon in the expected utility model. Under… CONTINUE READING

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