Secular Stagnation? Growth, Asset Returns and Welfare in the Next Decades

Projekt Start:01/2016
Forscher:Raphael Abiry, Christian Geppert, Dirk Krueger, Philipp Krüger, Alexander Ludwig
Bereich: Macro Finance
Finanziert von:LOEWE

Topic & Objectives

Quantification of the effects of demographic change on risky and risk-free asset returns.  

Key Findings

Demographic change will lead to a reduction of returns. Risk-free interest rate decreases by more than risky returns because households invest more strongly in risk-free assets as they become older which increases the price thus decreasing the return.

Policy Implications

Policy debate on how to finance old-age insurance must explicitly take return differentials between risk-free and risky returns into account.

Zugehörige Working Papers

145Raphael Abiry, Christian Geppert, Alexander LudwigSecular Stagnation? Growth, Asset Returns and Welfare in the Next Decades: First Results2016 Macro Finance secular stagnation; demographic change; overlapping generations; natural rate; equity premium; growth; welfare; human capital

Related Policy Publications

Alexander LudwigDemographischer Wandel: Kapitalrenditen, Löhne und Verteilungswirkungen
White Paper No. 38