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Demographics, GDP, and Future Stock Returns: The Implications of Some Basic Principles

Cornell, Bradford (2012) Demographics, GDP, and Future Stock Returns: The Implications of Some Basic Principles. Journal of Portfolio Management . pp. 96-99. ISSN 0095-4918. doi:10.2139/ssrn.2080637. https://resolver.caltech.edu/CaltechAUTHORS:20120927-094537602

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Abstract

The aging of the baby boom generation has focused investor attention on the issue of how changing demographics will affect the economy generally and the stock market specifically. One commonly expressed view is that stock returns will be depressed as baby boomers liquidate their portfolios to fund retirement. In this short paper, I return to basic theories of economic growth and asset pricing to disentangle the various ways in which demographics can affect future economic growth and future stock returns. I conclude that while the aging of the baby boom generation is indeed bad news for future economic growth, particularly on a per capita basis, it is unlikely to be lead to lower future stock returns.


Item Type:Article
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http://dx.doi.org/10.2139/ssrn.2080637DOIUNSPECIFIED
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2080637PublisherUNSPECIFIED
Additional Information:© 2012 Institutional Investor Inc. Summer 2012. I would like to thank Robert Arnott, Elisabeth Browne, and John Cochrane for provocative correspondence on the issues addressed in this article without implying that any of them agree with my views.
DOI:10.2139/ssrn.2080637
Record Number:CaltechAUTHORS:20120927-094537602
Persistent URL:https://resolver.caltech.edu/CaltechAUTHORS:20120927-094537602
Official Citation:Cornell, Bradford , Demographics, GDP and Future Stock Returns: The Implications of Some Basic Principles (March 9, 2012). Available at SSRN: http://ssrn.com/abstract=2080637 or http://dx.doi.org/10.2139/ssrn.2080637
Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:34498
Collection:CaltechAUTHORS
Deposited By: Jason Perez
Deposited On:27 Sep 2012 19:53
Last Modified:09 Nov 2021 23:08

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