The Baby Boomers are a larger than average size demographic cohort in the United States. The Baby Boomers have begun to retire and will continue to do so in increasing numbers through about 2030. The retired have a very different saving rate than people in the middle years of their careers. Apply the theory of supply and demand to financial markets to predict the likely impact on interest rates of the Baby Boomers retiring. Show graphically and explain the economic reasoning.
|How does the saving rate of middle-career individuals compare with that of retirees?||4|
|How will the retirement of the Baby Boomers affect the average saving rate in the U.S. economy?||4|
|Analyze the effect of the Baby Boomers retirement on the supply and demand for financial capital: Show graphically the initial and final equilibrium.||4|
|Analyze the effect of the Baby Boomers retirement on the supply and demand for financial capital: Explain the economics behind the graph.||4|
|Write up your analysis using correct language, explaining all your work.||4|