The potential effect of US baby-boom retirees on stock returns

Research output: Contribution to journalArticlepeer-review


Empirical studies demonstrated that US baby boomers consumption and savings patterns have affected economic aggregates over the past decades, among them equity returns. Boomers' retirement is expected to mitigate the demand for equities until 2050, but its impact varies with the specific population age structure along decades. This paper employs a dynamic asset pricing model with optimum consumption and portfolio rules to estimate aging effects on S&P500 returns between 1950 and 2050. Calibration for demographic and economic data between 1950 and 2005 yields model estimates that significantly explain the moving average of S&P500 returns. Further, taking into account the present value of expected demographic effects until 2050 suggests that the S&P500 was fairly priced at the heart of the financial crisis, on April 2009, but overpriced thereafter.

Original languageEnglish
Pages (from-to)106-121
Number of pages16
JournalNorth American Journal of Economics and Finance
StatePublished - 1 Nov 2014


  • Aging
  • Asset pricing
  • Baby-boom
  • Demography
  • Predictability

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics


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