Monthly Archives: December 2017

Happy Returns

A recently published paper, called “The Rate of Return on Everything, 1870–2015”, looks extremely interesting. The authors – Òscar Jordà, Katharina Knoll, Dmitry Kuvshinov, Moritz Schularick, and Alan M. Taylor – have collected a unique dataset of total returns for equity, housing, bonds, and treasury bills covering 16 advanced economies from 1870 to 2015.

The paper calculates real returns across asset classes on a global GDP weighted basis, as per this graph.

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The paper contains some fascinating conclusions, such as housing and equities having similar returns but with housing being considerably less volatile, as per this graph.

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Another fascinating graph is on the risk premium between risky and safe assets, as below.

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Given the time of year, I haven’t had an opportunity to consider the paper in detail but will hopefully get a chance over the Christmas break (and now back to wrapping presents!!).

A very happy Christmas to all who spend any time here. Have a great time and I hope Santa is kind!

Aging Gracefully

The OECD had an interesting piece on old age dependency ratios across countries, predicting that on average they would nearly double over the next 35 years for the 20-64 cohort, as per the graph below.

click to enlargeOld Age Dependency Ratio

Japan and Spain come out the highest in the 2050 projection, followed by Greece, Portugal, Italy and Korea. Interestingly, the countries that came out the lowest in the 2050 projection were Australia, the US, Turkey, Mexico and Israel.