# INTERGENERATIONAL EQUITY AND THE DISCOUNT RATE FOR POLICY ANALYSIS

@article{Mertens2011INTERGENERATIONALEA,
title={INTERGENERATIONAL EQUITY AND THE DISCOUNT RATE FOR POLICY ANALYSIS},
author={Jean-François Mertens and Anna Rubinchik},
journal={Macroeconomic Dynamics},
year={2011},
volume={16},
pages={61 - 93}
}
• Published 1 June 2011
• Economics
• Macroeconomic Dynamics
For two independent principles of intergenerational equity, the implied discount rate equals the growth rate of real per capita income, say, 2%, thus falling right into the range suggested by the U.S. Office of Management and Budget. To prove this, we develop a simple tool to evaluate small policy changes affecting several generations, by reducing the dynamic problem to a static one. A necessary condition is time invariance, which is satisfied by any common solution concept in an overlapping…
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