constraints on government investment opportunities and the choice of discount rate

abstract (outline): section i contains the basic argument and the most important conclusions. it would be possible to take away the main message without reading further. the remaining sections are principally concerned with the amplifications and extensions required to enable the theoretical conclusions to be practically applied. in section ii i discuss the procedure for calculating the shadow price of capital, which plays a central role in the theoretical analysis. in section iii and iv the model is extended to recognize many different private investment sectors and multi-period projects. in section v i offer some concluding remarks about the prospects for detailed application of the model, coming back at that point to the thesis that discounting at a pure time preference rate a defensive rule of thumb for government choices.