How CBO Uses Discount Rates to Estimate the Present Value of Future Costs or Savings

Congressional Budget Office

No 60284, Reports from Congressional Budget Office

Abstract: Many activities of the federal government have budgetary and other effects that can last far into the future. To produce estimates of those budgetary effects—and to help lawmakers compare different policies—CBO often has to translate a flow of future income or payments into an equivalent lump-sum value today. This report describes such present-value estimates, particularly how CBO selects and uses discount rates to calculate the value of future cash flows in its analyses.

JEL-codes: G00 G18 H50 H61 H81 H83 (search for similar items in EconPapers)
Date: 2024-10-07
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