Re: Re: Re: Re: Re: Re: Re: [Fwd: Re: query: Frank Ramsey]
Eugene, Indeed. The new wave coming out of these discussions has been hyperbolic discounting where a high discount rate is used to discount the near term future, but a lower and lower rate approaching zero is used to discount the far distant future. The ethical argument, pushed by Geoffrey Heal and Graciela Chichelnisky, is that of the so-called "green golden rule," that the present should not be able to exploit the future, but that the future should also not be able to exploit the present. The latter is a possibility when an outright zero discount is used throughout. Barkley Rosser -Original Message- From: Eugene Coyle [EMAIL PROTECTED] To: [EMAIL PROTECTED] [EMAIL PROTECTED] Date: Thursday, March 01, 2001 7:31 PM Subject: [PEN-L:8583] Re: Re: Re: Re: Re: Re: [Fwd: Re: query: Frank Ramsey] Thanks, Barkley. Now I have to think about this. It is kind of an attack on consumption and support for environmental protection, no? Gene "J. Barkley Rosser, Jr." wrote: Eugene, I can see that it is worded in an unclear manner. In this I am partly going with the literature that all interprets it to mean that he considers (positive) discounting to be "ethically indefensible." I have seen Ramsey's name used in connection with this argument on quite a few occasions. He is probably the first "respectable" economist to make the argument within the context of a formal model. One such secondary source is Kenneth Arrow, "Intergenerational Equity and the Rate of Discount in Long-Term Social Investment," in _Contemporary Economic Issues: Economic Behaviour and Design, Vol. 4, Papers and Proceedings of the Eleventh World Congress of the International Economic Association_, ed. by Murat R. Sertel, 1999, London: Macmillan, pp. 89-102. He discusses Ramsey's view on p. 95. Barkley Rosser -Original Message- From: Eugene Coyle [EMAIL PROTECTED] To: [EMAIL PROTECTED] [EMAIL PROTECTED] Date: Thursday, March 01, 2001 4:31 PM Subject: [PEN-L:8571] Re: Re: Re: Re: [Fwd: Re: query: Frank Ramsey] My confusion, I guess, is which practice Ramsey is saying is "ethically indefensible." Is "not discounting" ethically indefensible? Or is it discounting which is "ethically indefensible"? I should have paid more attention the year they were teaching diagramming sentences. I didn't, so I'm still confused. Gene Coyle "J. Barkley Rosser, Jr." wrote: Eugene, To "not discount" means to treat the "future enjoyments" as equal in value to present ones. That means using a zero discount rate. There are a lot of people in environmental and ecological economics who argue for this, along with a lot of others, including some from the Marxian tradition. There are a lot of issues floating around with this. Ramsey influenced Pigou who in 1932 complained about the "defective telescopic faculty" that people use when contemplating the future (and discounting, that is, devaluing it). Barkley Rosser -Original Message- From: Eugene Coyle [EMAIL PROTECTED] To: [EMAIL PROTECTED] [EMAIL PROTECTED] Date: Thursday, March 01, 2001 2:48 PM Subject: [PEN-L:8568] Re: Re: [Fwd: Re: query: Frank Ramsey] As I read the quoted sentence I take it to mean discount rates should be higher than, not zero. Clarify? Gene Coyle "J. Barkley Rosser, Jr." wrote: michael, "It is assumed that we do not discount later enjoyments in comparison with earlier ones, a practice which is ethically indefensible and arises merely from the weakness of the imagination." Frank P. Ramsey, "A Mathematical Theory of Saving," Economic Journal, 1928, vol. 38, no. 152, pp. 543-559, quote appearing on the first page. Essay also reprinted in D.H. Mellor, ed., _Foundations: Essays in Philosophy, Logic, Mathematics and Economics_, 1978, Atlantic Highlands, NJ: Humanities Press, pp. 261-281, where it appears on p. 261. Barkley Rosser -Original Message- From: michael perelman [EMAIL PROTECTED] To: [EMAIL PROTECTED] [EMAIL PROTECTED] Date: Thursday, March 01, 2001 1:01 AM Subject: [Fwd: [PEN-L:8500] Re: query: Frank Ramsey] He is also famous for arguing on ethical grounds that discount rates should be zero. I don't recall that in the 1928 article. Where did he say that? "J. Barkley Rosser, Jr." wrote: Frank Ramsey was a mathematical growth theorist and philosopher at Cambridge who died in his 20s in the 1920s. He was the first to posit a growth theory model with an infinite time horizon, I believe. His "Mathematical Theory of Saving" is very influential in growth theory. Offhand, I am not sure what a "Ramseyite&qu
Re: Re: Re: Re: Re: Re: Re: Re: [Fwd: Re: query: Frank Ramsey]
Barkley writes: The new wave coming out of these discussions has been hyperbolic discounting where a high discount rate is used to discount the near term future, but a lower and lower rate approaching zero is used to discount the far distant future. In practice, of course, long-term interest rates are usually higher than short-term ones. (The exception -- a yield-curve inversion -- often occurs before recessions.) Capitalism doesn't follow ethical standards. Jim Devine [EMAIL PROTECTED] http://bellarmine.lmu.edu/~jdevine
Re: Re: Re: Re: Re: Re: Re: Re: Re: [Fwd: Re: query: Frank Ramsey]
Jim, Ah, but that is because the risk premium is higher, at least supposedly. Barkley Rosser -Original Message- From: Jim Devine [EMAIL PROTECTED] To: [EMAIL PROTECTED] [EMAIL PROTECTED] Date: Friday, March 02, 2001 12:00 PM Subject: [PEN-L:8599] Re: Re: Re: Re: Re: Re: Re: Re: [Fwd: Re: query: Frank Ramsey] Barkley writes: The new wave coming out of these discussions has been hyperbolic discounting where a high discount rate is used to discount the near term future, but a lower and lower rate approaching zero is used to discount the far distant future. In practice, of course, long-term interest rates are usually higher than short-term ones. (The exception -- a yield-curve inversion -- often occurs before recessions.) Capitalism doesn't follow ethical standards. Jim Devine [EMAIL PROTECTED] http://bellarmine.lmu.edu/~jdevine
Re: Re: Re: Re: [Fwd: Re: query: Frank Ramsey]
My confusion, I guess, is which practice Ramsey is saying is "ethically indefensible." Is "not discounting" ethically indefensible? Or is it discounting which is "ethically indefensible"? I should have paid more attention the year they were teaching diagramming sentences. I didn't, so I'm still confused. Gene Coyle "J. Barkley Rosser, Jr." wrote: Eugene, To "not discount" means to treat the "future enjoyments" as equal in value to present ones. That means using a zero discount rate. There are a lot of people in environmental and ecological economics who argue for this, along with a lot of others, including some from the Marxian tradition. There are a lot of issues floating around with this. Ramsey influenced Pigou who in 1932 complained about the "defective telescopic faculty" that people use when contemplating the future (and discounting, that is, devaluing it). Barkley Rosser -Original Message- From: Eugene Coyle [EMAIL PROTECTED] To: [EMAIL PROTECTED] [EMAIL PROTECTED] Date: Thursday, March 01, 2001 2:48 PM Subject: [PEN-L:8568] Re: Re: [Fwd: Re: query: Frank Ramsey] As I read the quoted sentence I take it to mean discount rates should be higher than, not zero. Clarify? Gene Coyle "J. Barkley Rosser, Jr." wrote: michael, "It is assumed that we do not discount later enjoyments in comparison with earlier ones, a practice which is ethically indefensible and arises merely from the weakness of the imagination." Frank P. Ramsey, "A Mathematical Theory of Saving," Economic Journal, 1928, vol. 38, no. 152, pp. 543-559, quote appearing on the first page. Essay also reprinted in D.H. Mellor, ed., _Foundations: Essays in Philosophy, Logic, Mathematics and Economics_, 1978, Atlantic Highlands, NJ: Humanities Press, pp. 261-281, where it appears on p. 261. Barkley Rosser -Original Message- From: michael perelman [EMAIL PROTECTED] To: [EMAIL PROTECTED] [EMAIL PROTECTED] Date: Thursday, March 01, 2001 1:01 AM Subject: [Fwd: [PEN-L:8500] Re: query: Frank Ramsey] He is also famous for arguing on ethical grounds that discount rates should be zero. I don't recall that in the 1928 article. Where did he say that? "J. Barkley Rosser, Jr." wrote: Frank Ramsey was a mathematical growth theorist and philosopher at Cambridge who died in his 20s in the 1920s. He was the first to posit a growth theory model with an infinite time horizon, I believe. His "Mathematical Theory of Saving" is very influential in growth theory. Offhand, I am not sure what a "Ramseyite" approach would be, but I suggest that it involves infinite horizon optimal growth models. Ramsey was very influential] on Keynes and even people like Wittgenstein, but that side of him does not appear in his most famous paper (I think it appeared in the Economic Journal). Barkley Rosser -Original Message- From: Jim Devine [EMAIL PROTECTED] To: [EMAIL PROTECTED] [EMAIL PROTECTED] Date: Tuesday, February 27, 2001 12:17 PM Subject: [PEN-L:8480] query: Frank Ramsey Yesterday, I received an e-mail advertising a macroeconomics textbook that was based on the ideas of Frank Ramsey. It wasn't Keynesian or monetarist, but Ramseyite (to paraphrase the blurb). Does anyone know anything about Ramsey and his ideas? It sounds like he totally ignored the factor of uncertainty in making decisions about the future, but I don't know anything about him. Jim Devine [EMAIL PROTECTED] http://bellarmine.lmu.edu/~jdevine -- Michael Perelman Economics Department California State University Chico, CA 95929 Tel. 530-898-5321 E-Mail [EMAIL PROTECTED]
RE: Re: Re: Re: [Fwd: Re: query: Frank Ramsey]
Eugene, To "not discount" means to treat the "future enjoyments" as equal in value to present ones. That means using a zero discount rate. There are a lot of people in environmental and ecological economics who argue for this, along with a lot of others, including some from the Marxian tradition. There are a lot of issues floating around with this. Ramsey influenced Pigou who in 1932 complained about the "defective telescopic faculty" that people use when contemplating the future (and discounting, that is, devaluing it). Barkley Rosser -Original Message- From: Eugene Coyle [EMAIL PROTECTED] To: [EMAIL PROTECTED] [EMAIL PROTECTED] Date: Thursday, March 01, 2001 2:48 PM Subject: [PEN-L:8568] Re: Re: [Fwd: Re: query: Frank Ramsey] As I read the quoted sentence I take it to mean discount rates should be higher than, not zero. Clarify? Gene Coyle * http://www.p-i-r.com/papers/75/ Also Geoffrey Heal's "Valuing the Future: Economic Theory and Sustainability" has excellent treatment of the issue [math alert]. Ian
Re: Re: Re: Re: Re: [Fwd: Re: query: Frank Ramsey]
Eugene, I can see that it is worded in an unclear manner. In this I am partly going with the literature that all interprets it to mean that he considers (positive) discounting to be "ethically indefensible." I have seen Ramsey's name used in connection with this argument on quite a few occasions. He is probably the first "respectable" economist to make the argument within the context of a formal model. One such secondary source is Kenneth Arrow, "Intergenerational Equity and the Rate of Discount in Long-Term Social Investment," in _Contemporary Economic Issues: Economic Behaviour and Design, Vol. 4, Papers and Proceedings of the Eleventh World Congress of the International Economic Association_, ed. by Murat R. Sertel, 1999, London: Macmillan, pp. 89-102. He discusses Ramsey's view on p. 95. Barkley Rosser -Original Message- From: Eugene Coyle [EMAIL PROTECTED] To: [EMAIL PROTECTED] [EMAIL PROTECTED] Date: Thursday, March 01, 2001 4:31 PM Subject: [PEN-L:8571] Re: Re: Re: Re: [Fwd: Re: query: Frank Ramsey] My confusion, I guess, is which practice Ramsey is saying is "ethically indefensible." Is "not discounting" ethically indefensible? Or is it discounting which is "ethically indefensible"? I should have paid more attention the year they were teaching diagramming sentences. I didn't, so I'm still confused. Gene Coyle "J. Barkley Rosser, Jr." wrote: Eugene, To "not discount" means to treat the "future enjoyments" as equal in value to present ones. That means using a zero discount rate. There are a lot of people in environmental and ecological economics who argue for this, along with a lot of others, including some from the Marxian tradition. There are a lot of issues floating around with this. Ramsey influenced Pigou who in 1932 complained about the "defective telescopic faculty" that people use when contemplating the future (and discounting, that is, devaluing it). Barkley Rosser -Original Message- From: Eugene Coyle [EMAIL PROTECTED] To: [EMAIL PROTECTED] [EMAIL PROTECTED] Date: Thursday, March 01, 2001 2:48 PM Subject: [PEN-L:8568] Re: Re: [Fwd: Re: query: Frank Ramsey] As I read the quoted sentence I take it to mean discount rates should be higher than, not zero. Clarify? Gene Coyle "J. Barkley Rosser, Jr." wrote: michael, "It is assumed that we do not discount later enjoyments in comparison with earlier ones, a practice which is ethically indefensible and arises merely from the weakness of the imagination." Frank P. Ramsey, "A Mathematical Theory of Saving," Economic Journal, 1928, vol. 38, no. 152, pp. 543-559, quote appearing on the first page. Essay also reprinted in D.H. Mellor, ed., _Foundations: Essays in Philosophy, Logic, Mathematics and Economics_, 1978, Atlantic Highlands, NJ: Humanities Press, pp. 261-281, where it appears on p. 261. Barkley Rosser -Original Message- From: michael perelman [EMAIL PROTECTED] To: [EMAIL PROTECTED] [EMAIL PROTECTED] Date: Thursday, March 01, 2001 1:01 AM Subject: [Fwd: [PEN-L:8500] Re: query: Frank Ramsey] He is also famous for arguing on ethical grounds that discount rates should be zero. I don't recall that in the 1928 article. Where did he say that? "J. Barkley Rosser, Jr." wrote: Frank Ramsey was a mathematical growth theorist and philosopher at Cambridge who died in his 20s in the 1920s. He was the first to posit a growth theory model with an infinite time horizon, I believe. His "Mathematical Theory of Saving" is very influential in growth theory. Offhand, I am not sure what a "Ramseyite" approach would be, but I suggest that it involves infinite horizon optimal growth models. Ramsey was very influential] on Keynes and even people like Wittgenstein, but that side of him does not appear in his most famous paper (I think it appeared in the Economic Journal). Barkley Rosser -Original Message- From: Jim Devine [EMAIL PROTECTED] To: [EMAIL PROTECTED] [EMAIL PROTECTED] Date: Tuesday, February 27, 2001 12:17 PM Subject: [PEN-L:8480] query: Frank Ramsey Yesterday, I received an e-mail advertising a macroeconomics textbook that was based on the ideas of Frank Ramsey. It wasn't Keynesian or monetarist, but Ramseyite (to paraphrase the blurb). Does anyone know anything about Ramsey and his ideas? It sounds like he totally ignored the factor of uncertainty in making decisions about the future, but I don't know anything about him. Jim Devine [EMAIL PROTECTED] http://bellarmine.lmu.edu/~jdevine -- Michael Perelman Economics Department California State University Chico, CA 95929 Tel. 530-898-5321 E-Mail [EMAIL PROTECTED]
RE: Re: Re: Re: Re: Re: [Fwd: Re: query: Frank Ramsey]
"Ramsey and Harrod, the founders of modern theories of dynamic economics, were scathing about the ethical dimensions of discounting in a more general context, commenting respectively that discounting 'is ethically indefensible and arises merely from the weakness of the imagination' and that it is a 'polite expression for rapacity and the conquest of reason by passion'." [p. 12] "To illustrate, if one discounts present world GDP over two hundred years at 5% per annum, it is worth only a few hundred thousand dollars, the price of a good apartment. Discounted at 10%, it is equivalent to a used car." [p. 13] In: Heal, "Valuing the Future" -Original Message- From: [EMAIL PROTECTED] [mailto:[EMAIL PROTECTED]]On Behalf Of J. Barkley Rosser, Jr. Sent: Thursday, March 01, 2001 2:15 PM To: [EMAIL PROTECTED] Subject: [PEN-L:8578] Re: Re: Re: Re: Re: [Fwd: Re: query: Frank Ramsey] Eugene, I can see that it is worded in an unclear manner. In this I am partly going with the literature that all interprets it to mean that he considers (positive) discounting to be "ethically indefensible." I have seen Ramsey's name used in connection with this argument on quite a few occasions. He is probably the first "respectable" economist to make the argument within the context of a formal model. One such secondary source is Kenneth Arrow, "Intergenerational Equity and the Rate of Discount in Long-Term Social Investment," in _Contemporary Economic Issues: Economic Behaviour and Design, Vol. 4, Papers and Proceedings of the Eleventh World Congress of the International Economic Association_, ed. by Murat R. Sertel, 1999, London: Macmillan, pp. 89-102. He discusses Ramsey's view on p. 95. Barkley Rosser -Original Message- From: Eugene Coyle [EMAIL PROTECTED] To: [EMAIL PROTECTED] [EMAIL PROTECTED] Date: Thursday, March 01, 2001 4:31 PM Subject: [PEN-L:8571] Re: Re: Re: Re: [Fwd: Re: query: Frank Ramsey] My confusion, I guess, is which practice Ramsey is saying is "ethically indefensible." Is "not discounting" ethically indefensible? Or is it discounting which is "ethically indefensible"? I should have paid more attention the year they were teaching diagramming sentences. I didn't, so I'm still confused. Gene Coyle "J. Barkley Rosser, Jr." wrote: Eugene, To "not discount" means to treat the "future enjoyments" as equal in value to present ones. That means using a zero discount rate. There are a lot of people in environmental and ecological economics who argue for this, along with a lot of others, including some from the Marxian tradition. There are a lot of issues floating around with this. Ramsey influenced Pigou who in 1932 complained about the "defective telescopic faculty" that people use when contemplating the future (and discounting, that is, devaluing it). Barkley Rosser -Original Message- From: Eugene Coyle [EMAIL PROTECTED] To: [EMAIL PROTECTED] [EMAIL PROTECTED] Date: Thursday, March 01, 2001 2:48 PM Subject: [PEN-L:8568] Re: Re: [Fwd: Re: query: Frank Ramsey] As I read the quoted sentence I take it to mean discount rates should be higher than, not zero. Clarify? Gene Coyle "J. Barkley Rosser, Jr." wrote: michael, "It is assumed that we do not discount later enjoyments in comparison with earlier ones, a practice which is ethically indefensible and arises merely from the weakness of the imagination." Frank P. Ramsey, "A Mathematical Theory of Saving," Economic Journal, 1928, vol. 38, no. 152, pp. 543-559, quote appearing on the first page. Essay also reprinted in D.H. Mellor, ed., _Foundations: Essays in Philosophy, Logic, Mathematics and Economics_, 1978, Atlantic Highlands, NJ: Humanities Press, pp. 261-281, where it appears on p. 261. Barkley Rosser -Original Message- From: michael perelman [EMAIL PROTECTED] To: [EMAIL PROTECTED] [EMAIL PROTECTED] Date: Thursday, March 01, 2001 1:01 AM Subject: [Fwd: [PEN-L:8500] Re: query: Frank Ramsey] He is also famous for arguing on ethical grounds that discount rates should be zero. I don't recall that in the 1928 article. Where did he say that? "J. Barkley Rosser, Jr." wrote: Frank Ramsey was a mathematical growth theorist and philosopher at Cambridge who died in his 20s in the 1920s. He was the first to posit a growth theory model with an infinite time horizon, I believe. His "Mathematical Theory of Saving" is very influential in growth theory. Offhand, I am not sure what a "Ramseyite" approach would be, but I suggest that it involves infinite horizon opt
Re: Re: Re: Re: Re: Re: [Fwd: Re: query: Frank Ramsey]
Thanks, Barkley. Now I have to think about this. It is kind of an attack on consumption and support for environmental protection, no? Gene "J. Barkley Rosser, Jr." wrote: Eugene, I can see that it is worded in an unclear manner. In this I am partly going with the literature that all interprets it to mean that he considers (positive) discounting to be "ethically indefensible." I have seen Ramsey's name used in connection with this argument on quite a few occasions. He is probably the first "respectable" economist to make the argument within the context of a formal model. One such secondary source is Kenneth Arrow, "Intergenerational Equity and the Rate of Discount in Long-Term Social Investment," in _Contemporary Economic Issues: Economic Behaviour and Design, Vol. 4, Papers and Proceedings of the Eleventh World Congress of the International Economic Association_, ed. by Murat R. Sertel, 1999, London: Macmillan, pp. 89-102. He discusses Ramsey's view on p. 95. Barkley Rosser -Original Message- From: Eugene Coyle [EMAIL PROTECTED] To: [EMAIL PROTECTED] [EMAIL PROTECTED] Date: Thursday, March 01, 2001 4:31 PM Subject: [PEN-L:8571] Re: Re: Re: Re: [Fwd: Re: query: Frank Ramsey] My confusion, I guess, is which practice Ramsey is saying is "ethically indefensible." Is "not discounting" ethically indefensible? Or is it discounting which is "ethically indefensible"? I should have paid more attention the year they were teaching diagramming sentences. I didn't, so I'm still confused. Gene Coyle "J. Barkley Rosser, Jr." wrote: Eugene, To "not discount" means to treat the "future enjoyments" as equal in value to present ones. That means using a zero discount rate. There are a lot of people in environmental and ecological economics who argue for this, along with a lot of others, including some from the Marxian tradition. There are a lot of issues floating around with this. Ramsey influenced Pigou who in 1932 complained about the "defective telescopic faculty" that people use when contemplating the future (and discounting, that is, devaluing it). Barkley Rosser -Original Message- From: Eugene Coyle [EMAIL PROTECTED] To: [EMAIL PROTECTED] [EMAIL PROTECTED] Date: Thursday, March 01, 2001 2:48 PM Subject: [PEN-L:8568] Re: Re: [Fwd: Re: query: Frank Ramsey] As I read the quoted sentence I take it to mean discount rates should be higher than, not zero. Clarify? Gene Coyle "J. Barkley Rosser, Jr." wrote: michael, "It is assumed that we do not discount later enjoyments in comparison with earlier ones, a practice which is ethically indefensible and arises merely from the weakness of the imagination." Frank P. Ramsey, "A Mathematical Theory of Saving," Economic Journal, 1928, vol. 38, no. 152, pp. 543-559, quote appearing on the first page. Essay also reprinted in D.H. Mellor, ed., _Foundations: Essays in Philosophy, Logic, Mathematics and Economics_, 1978, Atlantic Highlands, NJ: Humanities Press, pp. 261-281, where it appears on p. 261. Barkley Rosser -Original Message- From: michael perelman [EMAIL PROTECTED] To: [EMAIL PROTECTED] [EMAIL PROTECTED] Date: Thursday, March 01, 2001 1:01 AM Subject: [Fwd: [PEN-L:8500] Re: query: Frank Ramsey] He is also famous for arguing on ethical grounds that discount rates should be zero. I don't recall that in the 1928 article. Where did he say that? "J. Barkley Rosser, Jr." wrote: Frank Ramsey was a mathematical growth theorist and philosopher at Cambridge who died in his 20s in the 1920s. He was the first to posit a growth theory model with an infinite time horizon, I believe. His "Mathematical Theory of Saving" is very influential in growth theory. Offhand, I am not sure what a "Ramseyite" approach would be, but I suggest that it involves infinite horizon optimal growth models. Ramsey was very influential] on Keynes and even people like Wittgenstein, but that side of him does not appear in his most famous paper (I think it appeared in the Economic Journal). Barkley Rosser -Original Message- From: Jim Devine [EMAIL PROTECTED] To: [EMAIL PROTECTED] [EMAIL PROTECTED] Date: Tuesday, February 27, 2001 12:17 PM Subject: [PEN-L:8480] query: Frank Ramsey Yesterday, I received an e-mail advertising a macroeconomics textbook that was based on the ideas of Frank Ramsey. It wasn't Keynesian or monetarist, but Ramseyite (to paraphrase the blurb). Does anyone know anything about Ramsey and his ideas? It sounds like he totally ignored the fact
