Demographic Changes, Financial Markets, and the Economy
Robert D. Arnott
Research Affiliates, LLC
Denis B. Chaves
The Vanguard Group, Inc.
June 24, 2011
Financial Analysts Journal, Vol. 68, No. 1, January/February 2012
Using a large sample of countries and 60 years of data, the authors found a strong and intuitive link between demographic transitions and both GDP growth and capital market returns. Unlike previous researchers, who used ad hoc and restrictive demographic variables, the authors imposed a smooth and parsimonious polynomial curve across all age groups. They also performed robustness checks and produced forecasts for the coming decade, with all the necessary caveats.
Number of Pages in PDF File: 28
Keywords: demography, demographics
JEL Classification: J1, J10, J11
Date posted: April 17, 2011 ; Last revised: December 28, 2016