Duality, interest rates, and the theory of present value

This paper uses duality theory to simplify and extend previous work which characterized technologies which have present value decreasing in interest rates. For "unbounded" interest rate sets, value nonincreasing is equivalent to truncation never being desirable. For bounded interest rate sets, the result is true if truncation is replaced by limited truncation, appropriately defined. Similarly, for equal forward rates, undesirability of geometric truncation characterizes nonincreasing value. Another result shows that if truncation is undesirable at an internal rate of return, then the internal rate of return is well behaved, even if value is not decreasing everywhere.