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Environmental and Resource Economics

, Volume 4, Issue 5, pp 527–534 | Cite as

Discounting in a world of limited growth

  • Thomas Sterner
Note

Abstract

This paper explores the consequences fordiscounting of assuming limits to growth. One of the main determinants of the discount rate is the rate of economic growth. If growth rates decline in the future then the discount rate should not be constant but also decline over time. In fact, we would then need not a single discount rate but rather a variable discount schedule. This would imply higher present values for the distant future. The paper analyses how discount rates would vary with different assumptions about the patterns of growth and the pure rate of time preference.

Key words

Discount logistic growth limits present value 

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Copyright information

© Kluwer Academic Publishers 1994

Authors and Affiliations

  • Thomas Sterner
    • 1
  1. 1.Department of EconomicsUniversity of GothenburgGöteborgSweden

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