Section 18 A Practical Application

• Library: Damages 2012

The plaintiff held a $10,000-a-year job before his injury. He had received an average pay increase of (1) six percent each year because of inflation and (2) four percent each year because of productivity. At trial, the economist:

· may project future wage increases of four percent each year (productivity);

· may not project future wage increases of six percent each year based on inflation; and

· may utilize a “real discount rate,” which also excludes inflation, because inflation is not being...