Closed hdrake closed 4 years ago
Can you provide some intuition as to why a positive growth rate may be functionally equivalent to reducing the discount rate? (I don't see how to make this work...??)
I'm going to read up on economics a bit before I reveal my ignorance of economics in a response...
I've convinced myself that economic growth doesn't actually matter in our model since the real (accounting for inflation) scaling costs of technologies are fixed, as is the damage cost parameter.
At the very least, there should be some prescribed economic growth. Depending on it's functional form, I think including a positive growth rate this may be functionally equivalent to a reducing the discount rate. Would need to think about whether various costs (climate controls and damages) scale with growth or not...