TY  - JOUR
AU  - Mitchell,Olivia S.
AU  - Piggott,John
AU  - Sherris,Michael
AU  - Yow,Shaun
TI  - Financial Innovation for an Aging World
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 12444
PY  - 2006
Y2  - August 2006
UR  - http://www.nber.org/papers/w12444
L1  - http://www.nber.org/papers/w12444.pdf
N1  - Author contact info:
Olivia S. Mitchell
University of Pennsylvania
Wharton School
3620 Locust Walk, St 3000 SH-DH
Philadelphia, PA 19104-6302
Tel: 215-898-0424
Fax: 215/898-0310
E-Mail: mitchelo@wharton.upenn.edu

John Piggott
School of Economics
University of New South Wales
Sydney 2052, Australia
E-Mail: j.piggott@unsw.edu.au

Michael Sherris
Faculty of Commerce and Economics
University of New South Wales
Sydney, Australia
E-Mail: m.sherris@unsw.edu.au

Shaun Yow
University of New South Wales
Sydney, Australia
E-Mail: shaun.yow@student.unsw.edu.au
AB  - Over the last half-century, around the world, many nations have seen plummeting fertility rates and mounting life expectancies. These two factors are the engine behind unprecedented global aging.  In this paper, we explore how the demographic transition may influence financial markets and, in turn, how financial market innovation might help resolve concerns flowing from global aging trends. We first provide context by reviewing the economics, finance, and insurance-related literature on how global aging patterns may influence capital markets. We then turn to insurance markets, and discuss a range of products and policies, including both retail and wholesale financial offerings for various forms of life annuities, long-term care benefits, reverse mortgages, securitization of longevity risk, inflation-protected assets, reinsurance, guarantees, derivative contracts on residential property price indices, mortality swaps and longevity derivative contracts. We also indicate how new public-private partnerships might be beneficial in enhancing the future environment for old-age risk management.
ER  -