TY - BOOK ID - 134372148 TI - Public versus Private Cost of Capital with State-Contingent Terminal Value AU - Greco, Luciano. AU - Moszoro, Mariano. PY - 2023 PB - Washington, D.C. : International Monetary Fund, DB - UniCat KW - Macroeconomics KW - Economics: General KW - Banks and Banking KW - Public Finance KW - Infrastructure KW - Project Evaluation KW - Social Discount Rate KW - Public Enterprises KW - Public-Private Enterprises KW - Industry Studies: Transportation and Utilities: General KW - Interest Rates: Determination, Term Structure, and Effects KW - National Government Expenditures and Related Policies: Infrastructures KW - Other Public Investment and Capital Stock KW - Investment KW - Capital KW - Intangible Capital KW - Capacity KW - Economic & financial crises & disasters KW - Economics of specific sectors KW - Finance KW - Public finance & taxation KW - Civil service & public sector KW - Discount rates KW - Financial services KW - National accounts KW - Public sector KW - Economic sectors KW - Public investment spending KW - Expenditure KW - Currency crises KW - Informal sector KW - Economics KW - Discount KW - Saving and investment KW - Finance, Public KW - Public-private sector cooperation KW - Public investments KW - Canada UR - https://www.unicat.be/uniCat?func=search&query=sysid:134372148 AB - The economic debate underlines the reasons why discount rates of infrastructure projects should be similar, regardless the public or private source of financing, during the forecast period when flows are risky but predictable. In contrast, we show that the incompleteness of contracts between governments and private firms beyond the forecast period (i.e., when flows of net social benefits are state-contingent) entails expected terminal values that are systematically larger under government rather than private financing. This effect provides a new rationale for applying a lower discount rate in the assessment of projects under public financing as compared to private financing. ER -