Asset-Market Effects of the Baby Boom and Social-Security Reform

Brooks, Robin

doi:10.1257/000282802320191697

Cited by 77 publications

(60 citation statements)

References 9 publications

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“…This result is qualitatively similar to Brooks (2002a), who models a production-based economy rather than an exchange-based economy. In Brooks' model, agents live for four periods:…”

Section: Theoretical Motivationsupporting

confidence: 85%

Do Demographic Changes Affect Risk Premiums? Evidence from International Data

Ang

Maddaloni

2003

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We examine the link between equity risk premiums and demographic changes using a very long sample over the twentieth century for the US, Japan, UK, Germany and France, and a shorter sample covering the last third of the twentieth century for fifteen countries. We find that demographic variables significantly predict excess returns internationally. However, the demographic predictability found in the US by past studies for the average age of the population does not extend to other countries. Pooling international data, we find that, on average, faster growth in the fraction of retired persons significantly decreases risk premiums. This demographic predictability of risk premiums is strongest in countries with well-developed social security systems and lesser-developed financial markets.

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“…This result is qualitatively similar to Brooks (2002a), who models a production-based economy rather than an exchange-based economy. In Brooks' model, agents live for four periods:…”

Section: Theoretical Motivationsupporting

confidence: 85%

Do Demographic Changes Affect Risk Premiums? Evidence from International Data

Ang

Maddaloni

2003

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“…On the other hand, a particular strand of the empirical literature has focussed on the effects that ageing may have on financial asset returns and portfolio allocations: see, e.g., Yoo (1994), Brooks (2000Brooks ( , 2002, Baldini and Onofri (2001), Davis and Li (2003), Ameriks and Zeldes (2004), Geanakoplos et al (2004), Goyal (2004) and Poterba (2001Poterba ( , 2004. This literature is essentially based on the life-cycle hypothesis according to which individual saving behaviour and portfolio choices vary over the life cycle to smooth consumption.…”

Section: Introductionmentioning

confidence: 99%

The Effect of Population Ageing on Household Portfolio Choices in Italy

Brunetti

Torricelli

2006

SSRN Journal

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“…The returns on stocks and bonds will be 0.47% and 0.55% below the steady state value in 2020 respectively. Overall, Brooks [9] concludes that although returns on Baby Boomers' savings at their time of retirement is 1% lower compared to the current rates, they will not be worse off than their parents or children.…”

Section: A Review Of the Theoretical Predictionmentioning

confidence: 98%

“…Brooks [9] augments a real business cycle model with an OLG model that assumes an individual has four periods; childhood, young working age, old working age and retirement. The simulation results indicate that old agents are risk aversion.…”

Section: A Review Of the Theoretical Predictionmentioning

confidence: 99%

Demographics and Asset Markets: A Survey of the Literature

Thenuwara¹,

Siriwardana²,

Hoang³

2017

TEL

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This paper surveys the theoretical and empirical literature examining the effects of population age structure on financial asset prices, including critical reviews of the methodologies used and an evaluation of contradictory results. The survey focuses on the effects of the Baby Boom generation on asset prices, and in particular, the question of the asset meltdown hypothesis (AMH). The existing literature reveals that an asset meltdown may never eventuate nevertheless it remains plausible that ageing of the Baby Boomers will have a significant negative impact on asset prices. The previous studies were based on where the proportion of the old age population is relatively low. With the first Baby Boomers reaching 65 years of age in 2011 this proportion is projected to increase substantially and hence the effect is reinforced. Thus new research is needed to address the unresolved issues given that population ageing has serious policy issues in the developed economies.

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Asset-Market Effects of the Baby Boom and Social-Security Reform

Cited by 77 publications

References 9 publications

Do Demographic Changes Affect Risk Premiums? Evidence from International Data

Do Demographic Changes Affect Risk Premiums? Evidence from International Data

The Effect of Population Ageing on Household Portfolio Choices in Italy

Demographics and Asset Markets: A Survey of the Literature

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