Article ID Journal Published Year Pages File Type
5061166 Economics Letters 2010 4 Pages PDF
Abstract

The so-called “Weitzman-Gollier puzzle” is the fact that two seemingly symmetric and equally plausible ways of dealing with uncertain future discount rates appear to give diametrically opposed results. The puzzle is resolved when agents optimize their consumption plans. The long run discount rate declines over time toward its lowest possible value.

Related Topics
Social Sciences and Humanities Economics, Econometrics and Finance Economics and Econometrics
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