Discover what demographics can tell us about the economy, markets, and the future
In Demographics Unravelled, renowned Macro-Demographics expert Amlan Roy delivers an insightful and timely exploration of the impact that "people characteristics" have on national economies. Considering factors like gender, race, migrant status, family background, and education, the author delves deeply into a subject that drives market behavior and economic variables, including growth, debt, inflation, employment, and productivity. These have national and international policy implications.
In this one-of-a-kind book, you’ll discover:
- Why the study of demographics is the hidden key to understanding economic growth, asset prices, and capital flows
- How to use detailed demographics to forecast future scenarios in economics, socioeconomics, geopolitics, and the environment
- The short-, medium-, and long-term effects of consumer and worker behavior
- How understanding demographics is key to understanding health, pensions, migration, sustainability and social policies. It is intimately linked to the Sustainable Development Goals of the UN - Gender, Climate, Poverty and Inequality
Perfect for institutional investors, insurance professionals, economists, and business leaders, Demographics Unravelled will also earn a place in the libraries of academics and students studying a variety of economic disciplines and seeking a one-stop and in-depth discussion of demographics-driven macroeconomic effects.
Table of Contents
Acknowledgements xv
Selected Abbreviations xvii
Preface xix
Chapter 1: Introduction 1
1.1 Recasting Demographics 2
1.2 Effects and Implications of Demographics 5
Chapter 2: Core Data: Past, Present, and Future 11
2.1 Economic History and the History of Global Population Trends 13
2.2 Core Demographic Variables: Data, Analysis, and Some Observations 16
2.2.1 Population Size and Population Growth 16
2.2.2 Ageing Populations 18
2.2.3 Life Expectancy Increases 20
2.2.4 Total Fertility Rates 21
2.2.5 Dependency Ratios 23
2.2.6 Gender Ratios 26
2.2.7 Age Structure and Population Pyramids 29
2.2.8 The Demographic Transition Model 32
2.3 The Role of Migration 35
2.4 Urbanisation 46
2.5 Small Nation- States: Demographics 50
2.6 Changing Longevity - Metrics Need Changing 51
2.7 Changing Social and Individual Behaviour 53
2.8 Multiple Generations 55
2.9 Conclusion 57
Chapter 3: Demographics and Macroeconomics 59
3.1 Demographics and Economic Growth 60
3.2 The “Demographic Dividend” and GDP per Capita Growth 66
3.3 Inflation 70
3.4 Debt, Deficits, and Fiscal Sustainability 84
3.5 Demographics, Monetary Policy, and Interest Rates 90
3.6 Demographics and Unemployment 93
3.7 Demographics, Capital Flows, and Current Account 95
3.8 Conclusions 96
Chapter 4: Demographics and Asset Prices 99
4.1 Theories of Life- Cycle Consumption, Savings, and the Permanent Income Hypothesis 100
4.1.1 Life- Cycle Consumption Theory 100
4.1.2 Permanent Income Hypothesis 102
4.1.3 Consumption, Savings, and Intertemporal Loans: Pioneer Paul Samuelson 104
4.2 How Demographics Influences Equity Prices and Markets 105
4.3 Will There Be an Asset Market Meltdown When the Baby Boomers Retire? 116
4.4 Demographic Changes and Interest Rates (Bond Yields) 119
4.5 Demographics and Risk Premiums 124
4.6 Asset Holdings and Age 125
4.7 Demographics and Equity Sectors 128
4.8 Demographics and Real Estate 136
4.9 Demographics and Commodities 140
4.10 Conclusions 143
Chapter 5: Health and Longevity 147
5.1 Health Issues, Expenditures, and Measures 149
5.1.1 Health Expenditures 150
5.1.2 Global Health Security 152
5.1.3 Global Burden of Disease 155
5.1.4 Health in Emerging Countries 157
5.2 Longevity 163
5.2.1 Increases in Life Expectancy and Conditional Life Expectancy 164
5.2.2 Life Expectancy vs. Healthy Life Expectancy 166
5.2.3 DALYs and Their Causes 168
5.2.4 Longevity and Mortality: More Than Just Births and Deaths 169
5.2.5 Longevity Risk and the Uncertain Future of Longevity 172
5.2.6 Longevity Forecasting Models: Countries and Regions 174
5.2.7 Short Summary of Longevity Models 177
5.2.8 Annuities as a Longevity Risk Management Tool 183
5.2.9 Other Longevity Risk Management Tools and Instruments 187
5.3 Conclusions 190
Chapter 6: Pensions and Retirement 193
6.1 A Brief History of Social Security and Pensions 194
6.1.1 Pre-Social Security 195
6.1.2 Committee on Economic Security 196
6.2 Evaluating Pension Systems: Indicators and Cross- Country Comparisons 200
6.3 Evaluating Age- Related Pension Expenditures Across Countries 208
6.4 Pensions and Pension Systems: The Experts 210
6.5 Pensions, Asset Allocation, Investments, and Capital Markets 224
6.6 Pensions and Corporate Finance/Equity Prices 230
6.7 The Future of Retirement and Conclusions 231
Chapter 7: Quality of Life, Gender, Governance and Sustainability 235
7.1 Utility Theory, Social Welfare, and Happiness 236
7.2 Quality of Life: Human Development Index (HDI) 243
7.3 Gender and Governance 245
7.4 Corruption and Transparency 249
7.5 Sustainability and Climate Change 252
7.6 Politics and Geopolitics 254
7.7 Conclusion 256
Chapter 8: Summary and Conclusions 257
Notes 263
Index 283
