Agenda

15 Jun 2026 12:15

Adrien Auclert (Stanford University)

Aula Baratto, Ca' Foscari

Adrien Auclert (Stanford University) - The Race Between Asset Supply and Asset Demand (joint with Hannes Malmberg, Matthew Rognlie, Ludwig Straub)

Abstract:

We introduce an asset supply-and-demand approach to analyze the trajectory of US aggregate wealth, real interest rates, and fiscal sustainability. Our framework uses micro-founded and easy-to-implement sufficient statistics to quantify how shifts in demographics, inequality, and other forces affect asset market equilibrium. From 1950 to the present, rapid population aging, rising income inequality, increasing foreign demand for US assets, and declining productivity growth all contributed to a surge in asset demand. Asset supply initially fell, then turned around sharply, mainly driven by increases in government debt and the value of capitalized profits. Overall, asset demand won the race, and interest rates fell. Looking ahead to 2100, population aging will continue to strongly push up asset demand, but at current tax and benefit levels, asset supply will win the race, as rising entitlement costs push up government debt even more. While rising asset demand creates space for debt to eventually reach 250% of GDP without higher interest rates, stabilizing debt at any level requires a permanent fiscal adjustment of at least 10% of GDP.

Language

The event will be held in English

Organized by

Department of Economics (EcSeminars)

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Programme 599 KB

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