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A Payback Approach to Generational Inequity
Author(s) -
Couch Robert B.
Publication year - 2016
Publication title -
public budgeting and finance
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.694
H-Index - 30
eISSN - 1540-5850
pISSN - 0275-1100
DOI - 10.1111/pbaf.12117
Subject(s) - equity (law) , normative , capital budgeting , politics , economics , public economics , equity capital , capital (architecture) , payback period , business , macroeconomics , microeconomics , finance , political science , capital market , project appraisal , archaeology , production (economics) , law , history
The payback approach to capital budgeting is proposed as a clear and intuitive way to think about fiscal policy and the normative problem of generational equity. Payback has been an enduring tool of corporate capital budgeting decisions and the home mortgage industry. As a clear and resonant conceptual tool, payback measures thus have the potential to mobilize political will for overcoming difficult fiscal policy problems, when they arise. Numerical examples calibrated to U.S. federal budget history illustrate how payback measures can be used in practice.