Population growth and asset prices

Peter S. Yoo
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Peter S. Yoo: https://carlsonschool.umn.edu/person/peter-yoo

No 1997-016, Working Papers from Federal Reserve Bank of St. Louis

Abstract: This paper explores the theoretical relationship between the population growth rate and asset prices implied by an overlapping-generations model. The model shows that changes in a population's age distribution affect asset prices but such changes generate low frequency movements in asset prices. The model also shows that the treatment of expectations matter; a small response of individuals to changes in asset prices has large implications for the path of asset prices. Finally, the model shows that incorporating a supply of assets by interpreting an asset as a claim on physical capital diminishes the magnitude of the relationship but does not change the sign or timing of the relationship between a population's age distribution and asset prices.

Keywords: Demography; Population; Prices (search for similar items in EconPapers)
Date: 1997
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedlwp:1997-016

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DOI: 10.20955/wp.1997.016

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