Discounting: Present Value and Future Generations

This lecture explores the concept of discounting and its implications for future generations. It discusses the present value of future sums of money, the impact of discount rates on climate change mitigation decisions, and the intergenerational trade-offs involved. The instructor presents examples to illustrate how discount rates affect decision-making processes and the importance of choosing the right discount rate. Additionally, the lecture delves into neuroscientists' perspectives on discounting, highlighting the conflict between instincts and reason in decision-making. The opportunity cost of public investment is also analyzed, emphasizing the trade-offs between public investment, private consumption, and private investment.