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Juanjuan Zhuo and Masao Kumamoto
''Threshold effects of population aging on stock prices''
( 2018, Vol. 38 No.4 )
The aim of this study is to investigate whether the changes in population age structure affect the stock prices in developed countries. Our main findings are that the proportions of population aged 20-39 and 40-64 years have an upward pressure on the stock prices, while the proportion of over 65 years has a downward pressure. Moreover, we find that if the proportion of the retired population aged over 65 years exceeds the threshold value, higher risk premium is required to compensate for the price fluctuation risks, which has a downward pressure on the stock prices. These results are consistent with both the life-cycle investment hypothesis and life-cycle risk aversion hypothesis, and are supportive for the possibility of asset meltdown hypothesis.
Keywords: demographic age structure, stock prices, threshold effects
JEL: J1 - Demographic Economics: General
Manuscript Received : Dec 03 2018 Manuscript Accepted : Dec 10 2018

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