Home > Working Papers

Working Paper 1997-016A

"Population Growth and Asset Prices"
by Peter S. Yoo

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.

Full Text - Acrobat PDF (675k)

Notify Me of Updates for:
Category > Monetary Policy/Macroeconomics
Research Papers and Publications: JEL Code > D91
Research Papers and Publications: JEL Code > E44
Research Papers and Publications: JEL Code > G12
Research Papers and Publications: JEL Code > J11