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The social discount rate

  • Andrew Caplin
  • John Leahy

In welfare theory it is standard to pick the consumption stream that maximizes the welfare of the representative agent. We argue against this position, and show that a benevolent social planner will generally place a greater weight on future consumption than does the representative agent.

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Paper provided by Federal Reserve Bank of Minneapolis in its series Discussion Paper / Institute for Empirical Macroeconomics with number 137.

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Date of creation: 2001
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Handle: RePEc:fip:fedmem:137
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