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Amlan Roy PhD
Founder, Global Macro Demographics
Research Associate, Systemic Risk Centre, LSE
Honorary Fellow, Institute & Faculty of Actuaries
www.globalmacrodemographics.com (Amlan Roy)
Demographics Unravelled
How Demographics Influence
Economics & Markets
Society for Professional Economists
London (17 October 2022)

Demographics Unravelled (Wiley, Jan 2022)
• Interface of Economics, Finance & Actuarial
Science
• Challenges convention by appealing to data,
intuition and application
• Praised by Nobel laureate, Fed President,
Investors, policy makers, pensions experts
• Mentioned by the FT’s Martin Wolf as one of
the best new books
• Addressed to investors, policy-makers and
academics

www.globalmacrodemographics.com (Amlan Roy)
Recasting and Unravelling Demographics
17 October 2022 3

The World’s Super-Old (80+ aged) Grow Fastest
Source: UN
www.globalmacrodemographics.com (Amlan Roy) 5

How Increasing Longevity Affects Us All?
• Challenge existing asset & time allocation frameworks &
intergenerational dynamics
Individual & families
• Policy changes in labour, education, health, pensions &
social benefits necessary
Governments & Societies
• Re-assess frameworks & assumptions. Develop new
solutions for clients & new approaches to understanding
longevity
Asset managers, pension
funds, insurance cos.,
SWFs.
www.globalmacrodemographics.com (Amlan Roy) 6
Significant change in thinking and mind-set needed
Source: Credit Suisse Demographics Research, IPE Pension awards key note speech (Noordwijk, 2013)

Radical Policy Actions: “The Demographic Manifesto”
Source: CS Demographics Research
www.globalmacrodemographics.com (Amlan Roy) 7

Core Indicators—G7 (Advanced Countries)
Source: UN
www.globalmacrodemographics.com (Amlan Roy) 8

GDP Growth: Demographic Decomposition
Source: GGDC, UN
www.globalmacrodemographics.com (Amlan Roy) 9

Demographics Has Driven Inflation Historically
Jim Reid and Team (DB)
• No country saw average annual
inflation below 2% since 1971 when
we moved to a global fiat currency
system (87 in our sample).
• Only 28 averaged less than 5%. No
country has seen annual average
inflation below 2% since 1900 (25 in
our sample) and only 4 between 2%–
3%.
• 20th century: They conclude that a
confluence of forces but ultimately
underpinned by a unique explosion in
the size of the global population,
especially in the second half of the
century
www.globalmacrodemographics.com (Amlan Roy) 10

Public Debt Strains Emanate from Demographics
Source: European Commission
www.globalmacrodemographics.com (Amlan Roy) 11

US: S&P 500 P/E Ratio & Middle/Old Ratio
Source: CS Demographics Research
www.globalmacrodemographics.com (Amlan Roy) 12

Equity Premia, House Prices & Bond Yields
www.globalmacrodemographics.com (Amlan Roy) 13

Demographics & Interest Rates
www.globalmacrodemographics.com (Amlan Roy) 14

What affects Housing Demand & Supply ?
• Population Growth
• Labour Market
• Wages & Income, Wealth
• Household Structure
• Rural and Urban
• Credit Provision
• Stage of life-life cycle and career
Demand
• State of the Economy
• Business Credit
• Land
• Complementary Infrastructure
• Labour & Materials supply
• Technology
Supply
www.globalmacrodemographics.com (Amlan Roy) 15

Which Sectors to Invest In?
www.globalmacrodemographics.com (Amlan Roy) 16

Global Pension Trends & Asset Allocation
Asset Allocation & Pension Trends (2001-2021)
2001 (% in asset class) 2021 (% in asset class)
Equities Bonds Cash Others Equities Bonds Cash Others
Australia 62 19 5 14 53 13 12 22
Canada 62 26 2 10 30 28 4 35
Japan 52 46 0 2 29 56 3 12
Netherlands 44 44 11 1 41 47 0 12
Switzerland 36 35 20 9 36 31 4 30
UK 67 18 5 10 29 62 2 7
US 65 28 2 5 50 31 0 19
Source: Willis Towers Watson (2008, 2022)
www.globalmacrodemographics.com (Amlan Roy) 17

Gender Equality: A Quadruple Dividend
Source: UN, IMF, SSGA
www.globalmacrodemographics.com (Amlan Roy) 18

www.globalmacrodemographics.com (Amlan Roy) 19
Conclusions
• Demographics affects macro fundamentals such as growth, inflation, debt
sustainability and current account
• Understanding of macro-demographic fundamentals is critical. Changing behaviour
of consumers and workers is rendering many old models invalid
• Retirement Planning requires changes in: Mindset, Tools & Asset Allocation
• SAA and SALM require better holistic and integrated understanding of asset price
and longevity dynamics

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