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Demographic transition and financial assets

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  • Rai, Karan
  • Garg, Bhavesh

Abstract

This study examines the impact of changing age structures on risky and risk-free assets. Considering that demographic transition is lagged in emerging market economies (EMEs) but the change in age structures will be more rapid than in advanced economies (AEs), we consider two panels of AEs and EMEs. Unlike previous literature on the demographic transition, we address the issue of cross-sectional dependence and slope heterogeneity. Our key findings suggest that the prime working-age population significantly influences both risky and risk-free assets in AEs and EMEs alike. However, the old-age dependency ratio tends to have a different impact on risk-free assets.

Suggested Citation

  • Rai, Karan & Garg, Bhavesh, 2025. "Demographic transition and financial assets," Emerging Markets Review, Elsevier, vol. 69(C).
    • Handle: RePEc:eee:ememar:v:69:y:2025:i:c:s1566014125000895
    DOI: 10.1016/j.ememar.2025.101340
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment
    • C1 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General
    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts

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