| The Impact Of Aging On Financial Markets and The Economy: A Survey |
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WP#2004-23 AbstractAll 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. For executive summary in PDF For full paper in PDF The authors are senior fellows in the Economic Studies program at the Brookings Institution in Washington, DC. The research reported herein was supported by the Center for Retirement Research at Boston College pursuant to a grant from the U.S. Social Security Administration funded as part of the Retirement Research Consortium. The opinions and conclusions are solely those of the authors and should not be construed as representing the opinions or policy of the Social Security Administration or any agency of the federal government, the Center for Retirement Research at Boston College, or The Brookings Institution. We gratefully acknowledge the research assistance of Marc de Fleurieu and the helpful comments and suggestions of Alicia Munnell and Steven Sass. |