Old Folks and Spoiled Brats: Why the baby Boomers' Saving Crisis Need Not be that Bad
AbstractWe study the impact of an anticipated "baby boom" in an overlapping generations economy.The rise of the working population lowers the wage, and the high demand for assets causes a rise in the price of capital which will be reversed when the baby boomers leave the work-force.However, the swings in factor prices are substantially dampened if we allow for more than two generations, endogenous labor supply, and convex capital adjustment costs.This is mainly due to the intertemporal shifts in labor market participation that can be observed if agents work for more than one period.Optimal saving and labor supply decisions of the baby boomers' preceding and subsequent generations partly offset the impact of the unfavorable demographic shock.Accordingly, the impact of a baby boom on the welfare of different generations crucially depends on the elasticity of labor supply.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Tilburg University, Center for Economic Research in its series Discussion Paper with number 2001-42.
Date of creation: 2001
Date of revision:
Contact details of provider:
Web page: http://center.uvt.nl
labour market; savings; share prices; population dynamics;
Other versions of this item:
- Monika BÜTLER & Philipp HARMS, 2001. "Old folks and spoiled brats : Why the baby boomers' saving crisis need not be that bad," Cahiers de Recherches Economiques du DÃ©partement d'EconomÃ©trie et d'Economie politique (DEEP) 01.07, Université de Lausanne, Faculté des HEC, DEEP.
- E2 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment
- E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook
This paper has been announced in the following NEP Reports:
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Finis Welch, 1979. "Effects of Cohort Size on Earnings: The Baby Boom Babies' Financial Bust," UCLA Economics Working Papers 146, UCLA Department of Economics.
- Andrew B. Abel, 2003.
"The Effects of a Baby Boom on Stock Prices and Capital Accumulation in the Presence of Social Security,"
Econometric Society, vol. 71(2), pages 551-578, March.
- Andrew B. Abel, 2002. "The effects of a baby boom on stock prices and capital accumulation in the presence of Social Security," Working Papers 03-2, Federal Reserve Bank of Philadelphia.
- Andrew B. Abel, 2002. "The Effects of a Baby Boom on Stock Prices and Capital Accumulation in the Presence of Social Security," NBER Working Papers 9210, National Bureau of Economic Research, Inc.
- Ríos-Rull José-Víctor, 2001. "Population Changes and Capital Accumulation: The Aging of the Baby Boom," The B.E. Journal of Macroeconomics, De Gruyter, vol. 1(1), pages 1-48, May.
- Welch, Finis, 1979. "Effects of Cohort Size on Earnings: The Baby Boom Babies' Financial Bust," Journal of Political Economy, University of Chicago Press, vol. 87(5), pages S65-97, October.
- Author-Name: John Geanakoplos & Michael Magill & Martine Quinzii, 2004.
"Demography and the Long-Run Predictability of the Stock Market,"
Brookings Papers on Economic Activity,
Economic Studies Program, The Brookings Institution, vol. 35(1), pages 241-326.
- John Geanakoplos & Michael Magill & Martine Quinzii, 2002. "Demography and the Long-run Predictability of the Stock Market," Cowles Foundation Discussion Papers 1380, Cowles Foundation for Research in Economics, Yale University.
- John Geanakoplos & Michael Magill & Martine Quinzii, 2002. "Demography and the Long-run Predictability of the Stock Market," Cowles Foundation Discussion Papers 1380R, Cowles Foundation for Research in Economics, Yale University, revised Jul 2004.
- Borgmann, Christoph, 2002. "Labor income risk, demographic risk, and the design of (wage-indexed) social security," Discussion Papers 100, Institut für Finanzwissenschaft, Albert-Ludwigs-Universität Freiburg.
- John Geanakoplos & Michael Magill & Martine Quinzii, 2003.
"Demography and the Long Run Behavior of the Stock Market,"
Levine's Working Paper Archive
506439000000000269, David K. Levine.
- John Geanakoplos & Michael Magill & Martine Quinzii, 2004. "Demography and the Long Run Behavior of the Stock Market," Levine's Bibliography 122247000000000643, UCLA Department of Economics.
- Garry Young, 2002. "The implications of an ageing population for the UK economy," Bank of England working papers 159, Bank of England.
- Philipp Harms & Philipp Meulen, 2012.
"The demographics of expropriation risk,"
Journal of Population Economics,
Springer, vol. 25(3), pages 809-832, July.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Richard Broekman).
If references are entirely missing, you can add them using this form.