Baby Boom, Population Aging, and Capital Markets.
This article tests how demographic changes affect capital markets. The life-cycle investment hypothesis states that at an early stage an investor allocates more wealth in housing and then switches to financial assets at a later stage. Consequently, the stock market should rise but the housing market should decline with the average age, a prediction supported in the post-1945 period. The second hypothesis that an investor's risk aversion increases with age is tested by estimating the resulting Euler equation and supported in the post-1945 period. A rise in average age is found to predict a rise in risk premiums. Copyright 1994 by University of Chicago Press.
Year of publication: |
1994
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Authors: | Bakshi, Gurdip S ; Chen, Zhiwu |
Published in: |
The Journal of Business. - University of Chicago Press. - Vol. 67.1994, 2, p. 165-202
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Publisher: |
University of Chicago Press |
Saved in:
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