Journal Of The Econometric Society

An International Society for the Advancement of Economic
Theory in its Relation to Statistics and Mathematics

Edited by: Guido W. Imbens • Print ISSN: 0012-9682 • Online ISSN: 1468-0262

Econometrica: Nov, 2023, Volume 91, Issue 6

The Cross-Sectional Implications of the Social Discount Rate
p. 2065-2088

Maya Eden

In this paper, I consider two normative questions: (1) how should policymakers approach tradeoffs that involve different age groups, and (2) at what rate should policymakers discount the consumption of future generations? I demonstrate that, under standard assumptions, these two questions are equivalent: caring more about the future means caring less about the elderly. Even small differences between the social discount rate and the market interest rate can have significant quantitative implications for the relative value placed on the consumption of different age groups.

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Supplemental Material

Supplement to "The Cross-Sectional Implications of the Social Discount Rate"

Maya Eden

The replication package for this paper is available at The Journal checked the data and codes included in the package for their ability to reproduce the results in the paper and approved online appendices.