Download Free The Impact Of Population Aging On Financial Markets Book in PDF and EPUB Free Download. You can read online The Impact Of Population Aging On Financial Markets and write the review.

The United States is in the midst of a major demographic shift. In the coming decades, people aged 65 and over will make up an increasingly large percentage of the population: The ratio of people aged 65+ to people aged 20-64 will rise by 80%. This shift is happening for two reasons: people are living longer, and many couples are choosing to have fewer children and to have those children somewhat later in life. The resulting demographic shift will present the nation with economic challenges, both to absorb the costs and to leverage the benefits of an aging population. Aging and the Macroeconomy: Long-Term Implications of an Older Population presents the fundamental factors driving the aging of the U.S. population, as well as its societal implications and likely long-term macroeconomic effects in a global context. The report finds that, while population aging does not pose an insurmountable challenge to the nation, it is imperative that sensible policies are implemented soon to allow companies and households to respond. It offers four practical approaches for preparing resources to support the future consumption of households and for adapting to the new economic landscape.
"A number of financial market analysts have argued that the aging of the "Baby Boom" cohort contributed to the rise U.S. asset values during the 1990s, and that asset prices will decline when this group reaches retirement age and begins to draw down its wealth. This paper explores the importance of changing demographic structure for asset returns, asset prices, and the composition of household balance sheets in the United States. Standard models suggest that equilibrium returns on financial assets will vary in response to changes in population age structure. While the direction of the effect of demographic changes is not controversial, the quantitative importance of such changes for financial markets is open to debate. The paper presents several strands of empirical evidence that bear on this issue. First, it describes current age-specific patterns of asset holding in the United States, and finds that asset holdings rise sharply when households are in their 30s and 40s. Aside from the automatic decline in the value of defined benefit pension assets as households age, however, other financial assets decline only gradually during retirement. When these data are used to project asset demands in light of the future age structure of the U.S. population, they do not show a sharp decline in asset demand between 2020 and 2050. This finding calls into question the "asset market meltdown" view. Second, the paper considers the historical association between population age structure and real returns on Treasury bills, long-term government bonds, and corporate stock. The evidence suggests only modest effects, if any, of a changing demographic mix. Statistical tests based on the few effective degrees of freedom in the historical record of age structure and asset returns have limited power to detect such effects. There is a stronger historical correlation between asset levels, as measured for example by the price-dividend ratio, and summary measures of the population age structure. Once again, however, the results are sensitive to choices about econometric specification. These empirical findings provide modest support, at best, for the view that asset prices could decline as the share of households over the age of 65 increases"--Prelim.
Korea is aging at a rapid pace, causing concern about the resulting socio-economic impacts. This study analyzes the expected changes in the financial markets and macroeconomic changes resulting from aging and seeks possible policy measures to mitigate the negative impacts of these changes. The estimated changes will be useful information for all market players to prepare for the future socio-economic changes.The policy implications based on the analyses are as follows: First, explore new roles for monetary policies. Second, use labor market approaches and financial market approaches together to respond to aging. Third, employ strategies using the income account to maintain current account balance.
Population aging will affect the performance of pension funds and financial markets in the former transition economies and require determined policy actions to complete financial market development and to promote financial literacy through education.
All major industrial countries will experience significant population aging over the next several decades. In both academic circles and the business press it is widely believed that population aging will have important effects on financial markets because of its expected impact on saving rates and the demand for investment funds. This paper reviews the literature on the macroeconomic and asset market effects of population aging, focusing on four related issues: (a) The impact of population age structure on aggregate household saving; (b) The effect of population aging on investment demand; (c) Evidence on the influence of population age structure on financial market asset prices and returns; and (d) Effects of globalization on our interpretation of the impact of demographic change.
This original and panoramic book proposes that the underlying forces of demography and globalisation will shortly reverse three multi-decade global trends – it will raise inflation and interest rates, but lead to a pullback in inequality. “Whatever the future holds”, the authors argue, “it will be nothing like the past”. Deflationary headwinds over the last three decades have been primarily due to an enormous surge in the world’s available labour supply, owing to very favourable demographic trends and the entry of China and Eastern Europe into the world’s trading system. This book demonstrates how these demographic trends are on the point of reversing sharply, coinciding with a retreat from globalisation. The result? Ageing can be expected to raise inflation and interest rates, bringing a slew of problems for an over-indebted world economy, but is also anticipated to increase the share of labour, so that inequality falls. Covering many social and political factors, as well as those that are more purely macroeconomic, the authors address topics including ageing, dementia, inequality, populism, retirement and debt finance, among others. This book will be of interest and understandable to anyone with an interest on where the world’s economy may be going.
The book gives an overview of the implications of population ageing on economic development and financial systems. It describes several challenges which the ageing process poses for central banks, giving special consideration to the situation in Europe. The first two chapters discuss the relationship between ageing and saving and between ageing and international capital flows. Other chapters consider the possible implications for financial markets. The final part raises issues which are of particular relevance for central banks, namely ageing and financial stability and how ageing will affect monetary policy.
As the United States and the rest of the world face the unprecedented challenge of aging populations, this volume draws together for the first time state-of-the-art work from the emerging field of the demography of aging. The nine chapters, written by experts from a variety of disciplines, highlight data sources and research approaches, results, and proposed strategies on a topic with major policy implications for labor forces, economic well-being, health care, and the need for social and family supports.
The retirement of the baby boom generation poses a challenge to the world's financial markets. This book examines the prospect that, after 2020, pension funds will have to pay out more in benefits than employers will be contributing, and it considers the extent to which individuals will liquidate equity holdings, or switch to bond holdings, or do both to sustain their living standards. The book examines the possibility that these changes will drive down equity values and bond returns.
The Economics of Aging presents results from an ongoing National Bureau of Economic Research project. Contributors consider the housing mobility and living arrangements of the elderly, their labor force participation and retirement, the economics of their health care, and their financial status. The goal of the research is to further our understanding both of the factors that determine the well-being of the elderly and of the consequences that follow from an increasingly older population with longer individual life spans. Each paper is accompanied by critical commentary.