Policymaking for Posterity

Lawrence Summers and Richard Zeckhauser

No 14359, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Policymaking for posterity involves current decisions with distant consequences. Contrary to conventional prescriptions, we conclude that the greater wealth of future generations may strengthen the case for preserving environmental amenities; lower discount rates should be applied to the far future, and special effort should be made to avoid actions that impose costs on future generations. -- Posterity brings great uncertainties. Even massive losses, such as human extinction, however, do not merit infinite negative utility. Given learning, greater uncertainties about damages could increase or decrease the optimal level of current mitigation activities. -- Policies for posterity should anticipate effects on: alternative investments, both public and private; the actions of other nations; and the behaviors of future generations. Such effects may surprise. -- This analysis blends traditional public finance and behavioral economics with a number of hypothetical choice problems.

JEL-codes: D64 D81 D90 Q54 (search for similar items in EconPapers)
Date: 2008-09
Note: EEE IFM
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (27)

Published as Lawrence Summers & Richard Zeckhauser, 2008. "Policymaking for posterity," Journal of Risk and Uncertainty, Springer, vol. 37(2), pages 115-140, December.

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