Suppose the government is considering funding

| November 24, 2016

Suppose the government is considering funding a road constructionproject, and must borrow to do so.When performing a cost-benefitanalysis of this project, what discount rate should the governmentuse?Suppose that this project is expected to have large spillovers,an enable firms to be more productive, as well as saving many livesin the future; how does this affect the discount rate the governmentshould use?

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