I argue that characterizing discount rate variation over time and across assets has replaced informational efficiency as the central organizing question of asset pricing research. I survey the facts: in the last 40 years we have learned that discount rates vary dramatically. Most views of the world

Discount-rate variation is the central organizing question of current asset-pricing research. I survey facts, theories, and applications. Previously, we thought returns were unpredictable, with variation in price-dividend ratios due to variation in expected cashflows. Now it seems all price

During the first eleven months of 2001, the Federal Open Market Committee (FOMC) announced ten reductions in its target for the federal funds rate. Each of the announcements also included a statement about the discount rate. For example, the November 6 announcement that the federal funds rate

In the economics of climate change, the future benefits of greenhouse gas emissions abatement are commonly discounted at a rate equal to the long-run return on corporate stocks, which averaged 6 % per year during the 20th century. Since a 6 % discount rate implies that one dollar of benefits

We consider an economy à la Lucas (1978, Econometrica 46, 1429–1446) with a risk-averse representative agent. The exogenous growth rate of the economy follows a random walk. We characterize the set of utility functions for which it is efficient to discount more distant cash flows at a lower rate

We develop an expression for the long-term discount rate in an economy in which a representative consumer has access to both a risk-free and a risky production technology. Even when the risk-free sector is very small, and with probability one becomes a negligible fraction of the economy in the long

with uncertain discount rates

Abstract not found

While numerous papers use a variety of methods to elicit individual subjective discount rates, only a few studies directly explore the validity of this hypothetical choice format. Using a longitudinal dataset of over 4,800 households, we first examine the consistency of the implied subjective

Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle