Social Time Preference Revisited
Posted: 8 Jul 2008
Date Written: July 8, 2008
The article reconsiders the implications of the choice of pure social time preference for intergenerational equity in the presence of a time-consistent utilitarian social welfare criterion. The analytic framework is a setting with overlapping generations, lifetime uncertainty, population growth and technical progress. The analysis identifies upper and lower bounds for the feasible range of social discount rates and draws a corresponding distinction between "gerontocratic" and "Stalinist" optimal plans. The paper corrects a number of inaccurate propositions in a related earlier contribution by Marini and Scaramozzino (2000) to this journal.
Keywords: Intergenerational equity, Overlapping generations, Social discount rate, Time consistency
JEL Classification: H43, E13, O41
Suggested Citation: Suggested Citation