Gollier, Christian - In: Economics: The Open-Access, Open-Assessment E-Journal 3 (2009) 2009-25, pp. 1-14
In this paper, we elaborate on an idea initially developed by Weitzman (1998) that justifies taking the lowest possible discount rate for far-distant future cash flows. His argument relies on the arbitrary assumption that when the future rate of return of capital (RRC) is uncertain, one should...