Demographic Changes, Financial Markets, and the Economy

Posted: 24 Jan 2012

See all articles by Robert D. Arnott

Robert D. Arnott

Research Affiliates, LLC

Denis B. Chaves

The Vanguard Group, Inc.

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Date Written: January 23, 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.

Keywords: Economics, Economic Growth and Development, Equity Investments, Equity Market Valuation and Return Analysis, Analysis of World Security Markets, Fixed Income, Macroeconomic Effects on Fixed-Income Yields, Portfolio Management, Economic Analysis and Capital Market Expectations

Suggested Citation

Arnott, Robert D. and Chaves, Denis Biangolino, Demographic Changes, Financial Markets, and the Economy (January 23, 2012). Financial Analysts Journal, Vol. 68, No. 1, 2012, Available at SSRN:

Robert D. Arnott (Contact Author)

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Denis Biangolino Chaves

The Vanguard Group, Inc. ( email )

100 Vanguard Blvd
Malvern, PA 19355
United States

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