Retirement in the Shadow (Banking) / Guillermo Ordoñez, Facundo Piguillem.

Format:

Book

Author/Creator:

Ordoñez, Guillermo.

Contributor:

National Bureau of Economic Research.

Piguillem, Facundo.

Series:

Working Paper Series (National Bureau of Economic Research) no. w26337.

NBER working paper series no. w26337

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Retirement in the Shadow

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2019.

Summary:

The U.S. economy has recently experienced two, seemingly unrelated, phenomena: a large increase in post-retirement life expectancy and a major expansion in securitization and shadow banking activities. We argue they are intimately related. Agents rely on financial intermediaries to save for post-retirement consumption. When expecting to live longer, they rely more heavily on intermediaries that use securitization, with riskier but higher returns. A quantitative evaluation of the model shows the potential of the demographic transition to account for a boom in credit and output, but only when it triggers a more extensive use of securitization and shadow banking.

Notes:

Print version record

October 2019.