The Consumption Rate of Interest and the Numbers Effect
Public Finance / Finances Publiques, Vol. 47(3), 1992, pp. 367-377
Posted: 7 Nov 2018
Date Written: 1992
This paper explores how the number of people affected can influence the determination of the Consumption Rate of Interest (CRI). To date the current literature has focused only on numbers in an intergenerational context, via concern with population size. These papers are summarized showing the commonality of the various approaches. From there, the role of numbers in an intragenerational setting is developed. The main result is that the "numbers effect" proper (the number of uncompensated osers from a project) raises the value of the CRI.
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