Econ 372 Discounting

Link to slides

For interest on Social Rate of Time Preference

• • William Nordhaus, "Revisiting the Social Cost of Capital"  PNAS February 14, 2017

  • "Discounting Inside the Washington D.C. Beltway", Coleman Bazelon and Kent Smetters, Journal of Economic Perspectives, Fall 1999

  • "When Bad Economics and Bad Climate Science Collide", Stephan DeCanio, (Real Climate Economics, October 1, 2010)

  • Steven Landsburg on what we should have done for the folks in New Orleans after Katrina.  Moral hazard!  Sunk costs! 

  • Law Professor Cass Sunstein was President Obama's lead CBA analyst.  (They were faculty together at University of Chicago.)  

    • Here is a critique of Cass Sunstein's views.

  • "A Mathematical Theory of Saving", Frank P. Ramsey, The Economic Journal, (Dec. 1928)  This is a very tough paper.

    • "[I]t is assumed that we do not discount later enjoyments in comparison with earlier ones, a practice which is ethically indefensible and arises merely from a weakness of the imagination...."

• Paul Samuelson, "A Note on Measurement of Utility", Review of Economic Studies (1937)

• (Former NU president) Robert Strotz, "Myopia and Inconsistency in Dynamic Utility Maximization", Review of Economic Studies, (1955)

• William Baumol, "On the Social Rate of Discount", American Economic Review, (1968)

• Shane Frederick, George Loewenstein, and Ted O'Donoghue, "Time Discounting and Time Preference:  A Review", Journal of Economic Literature, (2002)

For fun:  

• • Simpsons on impatience

  • Dilbert on risk analysis

  • Dilbert on discounting and more Dilbert on discounting

  • Benefit-Cost Analysis of risking the destruction of the Earth

  • How much should we care about people 1,000 years from now?

• An irrational decision?