--- In [EMAIL PROTECTED], Erik Reuter <[EMAIL PROTECTED]> wrote: > The GS study says > there will only be 2.3 workers for every person 65 and over in > 2050. If people retire at 65, there will be a lot more people > selling than buying in 2050 as compared to now.
I presume that you are referring to stocks. If you are looking at the stock market in isolation, the effect of what you describe should only change the nominal price level of stocks, not the actual price level. This is what I referred to before when I noted that monetary policy can be used to counteract the shifts brough about by this demand shock. Moreover, all that money being withdrawn from the stock market is now going to go towards consumption. That effect, at least, is arguable beneficial for business, as it would produce a positive demand shock for their products. The real problem is if that generation (keeping in mind that this is a 20-year generation, retiring across a span of 10+ years each, so it is not a sudden effect) doesn't have enough money to withdraw from asset markets to fuel consumption, and that money has to come from somewhere else. Well, o.k., we already know that they won't have enough - but how much *not enough* it is will have the biggest impact, since it will reduce the consumption (and ironically, the retirement savings) of the working generation at that time, in favor of boosting the consumption of the retired generation. JDG _______________________________________________ http://www.mccmedia.com/mailman/listinfo/brin-l
