Re: poly: Why interest rates may stay low

From: Robin Hanson <hanson@econ.berkeley.edu>
Date: Tue Mar 03 1998 - 09:32:26 PST

Alexander Chislenko writes:
>Some thoughts on money supply for investments and time discounting:
>People's tendency to prefer current to future interests should depend
>on how long they expect to live and what they will see in the future.

I don't see that it "should", but is may well anyway.

>In a more stable environment, when I expect to live longer
>and have the same money bring me more and more fun with
>time, I would discount my future income less.

Maybe so. But note that while this increase the total amount invested,
it should *decrease* the average return on investment, if the race to
be first burns off all ROT above the market marginal rate. This may
make growth rates slower, not faster.

Robin Hanson
hanson@econ.berkeley.edu http://hanson.berkeley.edu/
RWJF Health Policy Scholar, Sch. of Public Health 510-643-1884
140 Warren Hall, UC Berkeley, CA 94720-7360 FAX: 510-643-8614
Received on Tue Mar 3 17:37:30 1998

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