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What Will Happen to Financial Markets When the Baby Boomers Retire?, Robin Brooks

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Other version
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Label
What Will Happen to Financial Markets When the Baby Boomers Retire?, Robin Brooks
Language
eng
Abstract
This paper explores whether changes in the age distribution have significant effects on financial markets that are rational and forward-looking. It presents an overlapping generations model in which agents make a portfolio decision over stocks and bonds when saving for retirement- Using the model to simulate a baby boom-baby bust demonstrates that returns to baby boomers will be substantially below returns to earlier generations, even when markets are rational and forward-looking. This result is important because the current debate over how to reform pay-as-you-go pension systems often takes historical returns on financial assets—and on the equity premium—as given
resource.governmentPublication
international or intergovernmental publication
Literary form
non fiction
Main title
What Will Happen to Financial Markets When the Baby Boomers Retire?
Nature of contents
dictionaries
Responsibility statement
Robin Brooks
Series statement
IMF Working Papers