"Did the U.S. Social Discount Rate Increase Around 1970?" October 2025.

Paper: pdf file Abstract
This paper focuses on four facts. 1) The ratio of the U.S. stock of infrastructure to GDP shows a large and close-to-monotonic decline beginning around 1970. 2) The U.S. government deficit as a percent of GDP changed around 1970 from being close to zero to being large and positive. 3) A measure of the level of trust in the U.S. government fell in the early 1970's and has remained low. 4) Voter turnout fell beginning in the early 1970's. The hypothesis proposed in this paper is that there was around 1970 a change in tastes resulting in an increase in the social discount rate, triggered by the events in the late 1960's and early 1970's.