Semi-Daily Journal Archive

The Blogspot archive of the weblog of J. Bradford DeLong, Professor of Economics and Chair of the PEIS major at U.C. Berkeley, a Research Associate of the National Bureau of Economic Research, and former Deputy Assistant Secretary of the U.S. Treasury.

Saturday, November 04, 2006

Marginal Revolution: The Stern report on global warming

Tyler Cowen plumps for extremely low social rates of discount for policy evaluation:

Marginal Revolution: The Stern report on global warming: No, I am not going to read the whole 645-page report.... The resources that would have gone into consumption are harder to discount, especially if we are comparing those resources across the generations, and if the change in question is "large" rather than "small." I tend to favor a very low or zero discount rate in these settings, if only because there is no pure time preference across the generations. (Before you are born, you are not sitting around impatiently, waiting, unless of course you are a character in Maeterlinck's The Blue Bird.) In any case this is predominantly an ethical question, and no correct answer follows directly from examining marginal analysis and market prices...

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