Decision Sciences
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New formula revolutionizes social discount rates for long-term investments!

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Springer proceedings in business and economics
The Gains and Losses Puzzle in Discounting for Long-Term Investments: Reinterpreting Ramsey Approach for Intergenerational Perspective
Monika Foltyn-Zarychta

Paper Summary

The article explores how to calculate the value of long-term investments over generations. It focuses on the discount rate used to determine the worth of future benefits and costs. The researchers suggest a new way to calculate this rate, taking into account uncertainties and differences in how gains and losses are valued. Their approach aims to better reflect the unique challenges of intergenerational projects and ensure fair evaluations of their impacts.

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