Demography, Capital Flows and Asset Allocation over the Life-cycle

Konferenzbeitrag

This paper studies the effect of population aging on portfolio choice, asset prices and international asset trades. In a multi-period OLG model, we analyze how an increase in longevity or a decrease in fertility in a country affects the demand for safe and risky assets. In a closed economy, given a fixed supply, the riskfree rate falls and the risk premium rises, because retirees prefer to hold a larger share of safe assets in their portfolio than working-age households. In a financially integrated world, countries with more extreme demographic trends export risky assets and import safe assets. We quantify these effects for the United States.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Beiträge zur Jahrestagung des Vereins für Socialpolitik 2016: Demographischer Wandel - Session: Demographic Change and the Macroeconomy II ; No. D24-V2

Classification and Topics

• Classification: Wirtschaft ; Portfolio Choice; Investment Decisions ; International Financial Markets ; Demographic Trends, Macroeconomic Effects, and Forecasts

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Mann, Katja ; Davenport, Margaret
• Event: Veröffentlichung
• (who): ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften, Leibniz-Informationszentrum Wirtschaft
• (where): Kiel und Hamburg
• (when): 2016

Further information

• Handle: http://hdl.handle.net/10419/145948
• Last update: 10.03.2025, 11:41 AM CET