Reflections on What Financial Economics Can and Cannot Teach Us About the Social Discount Rate

IF 5 3区 经济学 Q1 BUSINESS, FINANCE Annual Review of Financial Economics Pub Date : 2023-08-25 DOI:10.1146/annurev-financial-041123-123258
Deborah J. Lucas
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引用次数: 1

Abstract

The principles of financial economics provide equally important insights into the optimal choice of discount rates for both public and private sector decision-makers. However, most governments largely ignore those principles, taking their cost of capital for most purposes as their borrowing rate. This article reviews the arguments often made in support of status quo discounting practices, along with the counterarguments to them. Governments have a choice between several methodologies for risk adjustment, and the practical and conceptual reasons that favor a fair value approach are recapped. The limitations of a financial economics approach become apparent for decisions involving very long time horizons, such as for climate policies. For policies with long-term impacts, intergenerational concerns become paramount, projections of cash flows and discount rates become highly uncertain, and present value calculations are an intrinsically unreliable measure of value. No approach to discount rate selection can overcome those problems; alternative decision criteria need to be established. However, most government investments involve much shorter horizons, and the adoption of standard approaches to risk adjustment could significantly improve social welfare. Expected final online publication date for the Annual Review of Financial Economics, Volume 15 is November 2023. Please see http://www.annualreviews.org/page/journal/pubdates for revised estimates.
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金融经济学对社会贴现率的启示
金融经济学原理为公共和私营部门决策者提供了关于贴现率最佳选择的同样重要的见解。然而,大多数政府在很大程度上忽视了这些原则,将大多数用途的资金成本作为借款利率。本文回顾了支持现行贴现做法的论点,以及对它们的反驳。政府可以在几种风险调整方法之间进行选择,并概述了赞成公允价值方法的实际和概念原因。金融经济学方法的局限性在涉及很长时间跨度的决策(如气候政策)中变得明显。对于具有长期影响的政策,代际问题变得至关重要,现金流量和贴现率的预测变得高度不确定,而现值计算本质上是一种不可靠的价值衡量标准。没有任何一种折现率选择方法能够克服这些问题;需要建立可供选择的决策标准。然而,大多数政府投资涉及的期限要短得多,采用标准的风险调整方法可以显著改善社会福利。《金融经济学年度评论》第15卷的最终在线出版日期预计为2023年11月。修订后的估计数请参阅http://www.annualreviews.org/page/journal/pubdates。
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26
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