2026-04-14T04:00:03Zhttps://recercat.cat/oai/request

oai:recercat.cat:2445/964202025-11-19T20:25:21Zcom_2072_1057col_2072_478822col_2072_478917

00925njm 22002777a 4500 dc Farmer, J. Doyne author Geanakoplos, John author Masoliver, Jaume, 1951- author Montero Torralbo, Miquel author Perelló, Josep, 1974- author 2016-03-14T07:50:26Z 2016-03-14T07:50:26Z 2015-05-28 2016-03-14T07:50:31Z We analyze how to value future costs and benefits when they must be discounted relative to the present. We introduce the subject for the nonspecialist and take into account the randomness of the economic evolution by studying the discount function of three widely used processes for the dynamics of interest rates: Ornstein- Uhlenbeck, Feller, and log-normal. Besides obtaining exact expressions for the discount function and simple asymptotic approximations, we show that historical average interest rates overestimate long-run discount rates and that this effect can be large. In other words, long-run discount rates should be substantially less than the average rate observed in the past, otherwise any cost-benefit calculation would be biased in favor of the present and against interventions that may protect the future. Matèria condensada Anàlisi cost-benefici Interès Condensed matter Cost effectiveness Interest Value of the future: discounting in random environments