The theory of long-term socially efficient discount rates : a report on fundamental issues concerning long-term discounting

摘要

This thesis discusses the theory of long-term discount rates for evaluation of longtermpublic projects. While there are many public projects with a distant timehorizon, the threat of global climate change has vastly stimulated economic researchand debate on the socially ecient discount rate for such applications. Due to absenceof ecient interest rate markets with distant maturities, the work in progressis heavily relying on the sophistication of economic theory. I present the essence ofthe debate following the Stern review centered around the so-called Ramsey-rule,by which I depart from to investigate the recent development on declining discountrates that incorporates risk and uncertainty of the future. I hope to clarify some ofthe basis upon which arguments are held in the literature.