We study a dynamic overlapping generations model where the population growth rate is stochastic, or can experience gradual but persistent changes. This leads to changes in the demographic makeup of the economy across the young, middle aged (who do the principal saving) and the old (who sell their assets to finance consumption). Our focus is the asset pricing implications of persistent changes in the population growth rate as it works through the resultant changes in the age distribution of the population. The paper is able to comment on the question: What will happen to stock market valuations when the baby-boom generation retire?
There is a draft of this paper available.