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Sunstein on Discount Rates

You hear sometimes that Cass Sunstein would be a likely candidate for a high-level post in an Obama Administration. I have no idea whether or not that’s true, but if it’s something he’s interested in then co-authoring poorly reasoned AEI papers whose conclusions support the idea that we shouldn’t take action to curb the risks of climate change seems like a weird way to go about it.

But in addition to the points John Quiggin raises about these methods, I’d like to make the point that while I think GDP is a better proxy for well-being than Robert Kennedy thought in the domestic US context, it’s an exceeding poor metric for looking at a global problem. Some places are much poorer than others — putting all of Bangladesh under water and killing its entire population wouldn’t have an especially noteworthy impact on global GDP numbers but that would still be a terrible turn of events.

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