The authors find a linkage between labor market conditions and future capital market returns: An increase in the unemployment rate is linked to positive excess returns in both stock and bond markets for the 24-month period following the unemployment rate announcement. Furthermore, by controlling...

In this paper, we show that the historically unmatched economic performance experienced by developed countries over the past 60 years was supported by temporary and abnormal demographic conditions: extraordinary growth in the working-age population supporting both a plunging roster of young...