Policymaking for Posterity

51 Pages Posted: 23 Sep 2008 Last revised: 27 Sep 2010

See all articles by Lawrence H. Summers

Lawrence H. Summers

Harvard University; National Bureau of Economic Research (NBER); Harvard University - Harvard Kennedy School (HKS)

Richard J. Zeckhauser

Harvard University - Harvard Kennedy School (HKS); National Bureau of Economic Research (NBER)

Multiple version iconThere are 2 versions of this paper

Date Written: September 2008

Abstract

Policymaking for posterity involves current decisions with distant consequences. Contrary to conventional prescriptions, we conclude that the greater wealth of future generations may strengthen the case for preserving environmental amenities; lower discount rates should be applied to the far future, and special effort should be made to avoid actions that impose costs on future generations. -- Posterity brings great uncertainties. Even massive losses, such as human extinction, however, do not merit infinite negative utility. Given learning, greater uncertainties about damages could increase or decrease the optimal level of current mitigation activities. -- Policies for posterity should anticipate effects on: alternative investments, both public and private; the actions of other nations; and the behaviors of future generations. Such effects may surprise. -- This analysis blends traditional public finance and behavioral economics with a number of hypothetical choice problems.

Suggested Citation

Summers, Lawrence H. and Zeckhauser, Richard J., Policymaking for Posterity (September 2008). NBER Working Paper No. w14359. Available at SSRN: https://ssrn.com/abstract=1271391

Lawrence H. Summers (Contact Author)

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Harvard University - Harvard Kennedy School (HKS) ( email )

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Richard J. Zeckhauser

Harvard University - Harvard Kennedy School (HKS) ( email )

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National Bureau of Economic Research (NBER) ( email )

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