| Description |
1 online resource (36 pages) : illustrations |
| Series |
IMF working paper ; WP/00/18 |
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IMF working paper ; WP/00/18.
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| Summary |
This paper explores the effects of changes in the age distribution on returns to financial assets. The aging of the baby boomers and speculation over possible effects on financial markets has raised the profile of this issue, both in the financial press and in academic circles. 2 Broadly speaking, there are two opposing views. The first holds that retiring baby boomers will be selling their assets to a smaller generation of young investors. This will drive asset prices down, leaving baby boomers with a smaller nest-egg than anticipated. The second maintains that forward-looking financial markets are pricing assets to incorporate the aging of the boomer generation. As a result, there will not be a market meltdown when the baby boomers retire. This paper bridges the gap between these opposing arguments by asking the following question: can demographic change, which is slow-moving and predictable, have a significant impact on financial markets that are rational and forward-looking? It presents a model in which rational, forward-looking agents of different ages trade in financial assets, and uses this framework to simulate a baby boom-baby bust of the kind observed in many developed countries over the post-war period. The main finding of the paper is that changes in the age distribution have significant effects on asset returns, even when investors are rational and forward-looking, and that these effects have important implications for the welfare of baby boomers and surrounding cohorts |
| Bibliography |
Includes bibliographical references (pages 35-36) |
| Notes |
Master and use copy. Digital master created according to Benchmark for Faithful Digital Reproductions of Monographs and Serials, Version 1. Digital Library Federation, December 2002. http://purl.oclc.org/DLF/benchrepro0212 MiAaHDL |
|
English |
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digitized 2010 HathiTrust Digital Library committed to preserve pda MiAaHDL |
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Print version record |
| Subject |
Baby boom generation -- Econometric models
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Aging -- Econometric models
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Saving and investment -- Econometric models
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Pensions -- Econometric models
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Rate of return -- Econometric models
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Pensions -- Econometric models
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Rate of return -- Econometric models
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Saving and investment -- Econometric models
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| Form |
Electronic book
|
| Author |
International Monetary Fund. Research Department, issuing body.
|
| ISBN |
1451891482 |
|
9781451891485 |
|
1281604461 |
|
9781281604460 |
|
1462356141 |
|
9781462356140 |
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1452780579 |
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9781452780573 |
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9786613785152 |
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6613785156 |
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9781451843637 |
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1451843631 |
| ISSN |
2227-8885 |
|
