New Dimension of the Efficiency-Versus-Equity Debate
New Dimension of the Efficiency-Versus-Equity Debate

Summary/Abstract: The old efficiency-versus-equity debate acquired a new dimension during the last decade. It turned out that some of the global problems – including climate change – imply a very long time horizon which puts intergenerational equity at the core. This called for a totally new approach to cost-and-benefit analysis. The paper looks at two issues that require careful scrutiny: welfare criteria for long time trajectories and social discount rates.

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