The Social Discount Rate

Andrew Caplin () and John Leahy ()

No 7983, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: In welfare theory it is standard to pick the consumption stream that maximizes the welfare of the representative agent. We argue against this position, and show that a benevolent social planner will generally place a greater weight on future consumption than does the representative agent. Our analysis has immediate implications for public policy: agents discount the future too much and the government should promote future oriented policies.

JEL-codes: D60 D90 (search for similar items in EconPapers)
Date: 2000-10
Note: PE
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Related works:
Working Paper: The social discount rate (2001)
Journal Article: The Social Discount Rate (2004)
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