The Effects of a Baby Boom on Stock Prices and Capital Accumulation in the Presence of Social Security

Andrew Abel

Econometrica, 2003, vol. 71, issue 2, 551-578

Abstract: Is the stock market boom a result of the baby boom? This paper develops an overlapping generations model in which a baby boom is modeled as a high realization of a random birth rate, and the price of capital is determined endogenously by a convex cost of adjustment. A baby boom increases national saving and investment and thus causes an increase in the price of capital. The price of capital is mean--reverting so the initial increase in the price of capital is followed by a decrease. Social Security can potentially affect national saving and investment, though in the long run, it does not affect the price of capital. Copyright The Econometric Society 2003.

Date: 2003
References: Add references at CitEc
Citations: View citations in EconPapers (162)

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
Working Paper: The effects of a baby boom on stock prices and capital accumulation in the presence of Social Security (2002)
Working Paper: The Effects of a Baby Boom on Stock Prices and Capital Accumulation in the Presence of Social Security (2002)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ecm:emetrp:v:71:y:2003:i:2:p:551-578

Ordering information: This journal article can be ordered from
https://www.economet ... ordering-back-issues

Access Statistics for this article

Econometrica is currently edited by Guido Imbens

More articles in Econometrica from Econometric Society Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery ().