Based on an article pub- lished in The Economists’ Voice titled `Global Climate Change: A Challenge to Policy’, by a Nobel laureate Kenneth J . Arrow , in 2011. ———————————————– In this article, the consumption discount rate, denoted by , is de ned as =+g . What do the terms and g represent? Explain the intuition behind this equation. One critique says that any kind of uncertainty regarding g may lower the value of .Do you agree or disagree with the critique? What are the implications to the economy of having a lower value of , when human-induced global warming is occurring? Explain. [ 8 marks]
the consumption discount rate, denoted by , is de ned as =+g . What do the terms and g represent? Explain the intuition behind this equation. One critique says that any kind of uncertainty regarding g may lower the value
