Demographics Unravelled. Amlan Roy
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the Author
Dr Amlan Roy is an experienced global macro-finance researcher and thought leader specialising in global macroeconomics and demographics. He presents to institutional clients in the private and public sectors across 30+ countries and is the founder of Global Macro Demographics. He is a research associate at London School of Economics' Systemic Risk Centre and an elected Honorary Fellow of the Institute and Faculty of Actuaries.
Until June 2021, Amlan was head of Global Macro Research and senior managing director with State Street Global Advisors, having joined them in 2017 as chief retirement strategist. He was managing director and head of global demographics and pensions research with Credit Suisse Investment Bank from 1998 to 2016. In a prior role as global EM strategist, he developed global risk and allocation models as an expert on financial architecture during the Asian crisis.
Amlan spent 12 years in academia, with a distinguished teaching career in the US and UK. He was UK ESRC Research Fellow, Ponders Fellow, a Boston University Doctoral Scholar and a Government of India National Scholar. He has a PhD and MA in financial economics from the University of Iowa, an MBA from the Indian Institute of Management, Ahmedabad and an undergraduate honours degree in economics from St. Stephen's College, University of Delhi.
Jodi tor daak shoone keu na aashe, tobe ekla cholo re.
—Nobel Laureate Rabindranath Tagore (1905; in Bengali).Translation: “If no one responds to your call, then walk the distance yourself”.
Acknowledgements
This book is the fruit of research efforts in the area of demographics over more than two decades. My initiation into demographics research owes a huge debt to Giles Keating, head of research at Credit Suisse Investment Bank, where I started the Global Demographics Project with him. Dick Hokenson, a collaborator, friend, and partner who joined Credit Suisse from DLJ in 2000, taught me a lot by sharing his knowledge as one of the experienced researchers in this area. Stefano Natella, former global head of equity research at Credit Suisse, was a strong supporter and believer, as was Lara Warner, business leaders (Gael de Boissard, Bob Jain, Tim O'Hara, Eraj Shirvani, and Stephen Dainton) provided management support at Credit Suisse, as did Rick Lacaille at State Street Global Advisors
Thanks to all my co-authors in demographics research (over the last two decades) for their collaboration, ideas, and support. Special thanks to Amy Le, my latest co-author and valuable research partner over the last four years. My growth as a researcher in this area owes a great deal to engagement and dialogue with global clients (pension funds, insurance companies, sovereign wealth funds, asset managers, endowments, private banks, foundations, central banks, regulators, hedge funds, private equity, and governments). Close partnership with several global sales teams helped me engage with global clients, and the sales partners have been a source of friendship and support.
Several influencers deserve a mention of gratitude: Andy Abel, Mukul Asher, Zvi Bodie, David Bloom, John Campbell, Jim Poterba, Steve Haberman, Andy Abel, Larry Kotlikoff, Andrew Ang, Angela Maddaloni, Orazio Attanasio, Carlo Favero, David Miles, Jim Bullard, Dirk Broeders, Theo Kocken, Luis Viceira, Tom Steenkamp, Elroy Dimson, Pablo Antolin, Arun Muralidhar, Mirko Cardinale, and David Blake.
Close friends Bala Venkatesh, Narayan Naik, Olivier Ledoit, David Webb, and Charles Bean have been there to debate, discuss, and teach me many things. Tom Frost and Tahir Wahid have been very special friends and colleagues in my career journey—my salute to them, too.
A big thank you to the Systemic Risk Centre and Financial Markets Group of the London School of Economics (LSE), which I have been affiliated with. Thank you to the CFA Institute and the Institute and Faculty of Actuaries for multiple conference speaking opportunities My thanks to the researchers and policymakers at the World Bank, International Monetary Fund, Asian Development Bank (ADB), and Inter American Development Bank (IADB).
My most important debt is to my lovely family, who have always supported me: my wife Anjana and daughters Antara and Anusha. My late aunt Subhanjali Sarkar and cousin Chitralekha were pillars of strength through many troubled times in the past, so I also owe a lot to them. And thanks to all those who have been pressuring me over the last eight years to write a book on demographics.
Finally, I would like to thank Gemma Valler and Purvi Patel of Wiley for their guidance. A very special thanks to Tiffany Taylor for excellent editorial work in improving the book's readability. Gladys Ganaden created the nice cover design. Daughter Antara chose the final cover image. Thanks to Ashok Ravi who provided tips for efficient edits at final stage.
I hope that this book contributes to inspiring readers to broaden their views and perspectives in more fields than just demographics. Viewing data and events from multiple angles provides additional richness to our insights.
Preface
This book is about my interpretation of demographics and its manifest implications for investments, macroeconomics, and policy. It represents more than two decades of research and synthesizes the connectivity of demographics with several subfields of economics: history, macroeconomics, international economics, labour economics, monetary policy, financial economics, development economics, etc. Repeated requests from clients, friends, and family, especially over the last eight years, have been the motivation for this book. My perspective is largely uniquely mine and like that of Peter F. Drucker1.
I draw on my teaching and reading across various subdisciplines of economics and finance to make demographics relevant for investment practitioners, policymakers, and applied researchers. My research notes have made this discipline relevant across different asset classes (equities, fixed income, real estate, commodities, alternatives) and geographies. This allowed for creation of investment products and funds based on the applied research. I challenge many conventional perceptions as being narrow and at best partially correct, offering multiple examples.
I believe that demographics pertains to each individual on the planet and not just the young or the old. I also highlight differences across old countries and old individuals, cautioning against blanket generalizations as the only defining criterion. The idea in the book is to explain relationships between demographic variables and economic as well as financial variables in an intuitive and consistent fashion. Wherever possible data, models, and frameworks are used to embellish the ideas.
In the spirit of a “Brave New World”2, this book challenges convention, expanding the boundaries of thought for understanding the real world of economics, investments, and policy options across multiple generations. It brings together macro and investment insights holistically with implications for individuals, companies, and countries. It discusses the important area of intergenerational fairness in a world where up to four or five generations co-exist for the first time in human history. Social responsibility and gender equality are at the core of important policy issues I discuss for a braver, better world. I hope the ideas in this book inspire discussion, debate, and understanding of issues that are critical for a better future society.
The structure of the book is as follows:
1 Introduction. This chapter introduces and amplifies a broader, more insightful perspective of demographics. It presents the layout and chapter sequence with a few sentences to highlight the key issues, major take-aways, and challenges to a traditionalist perspective. It should encourage readers to go to specific chapters on a deeper dive to unravel various strands of demographics.
2 Global demographic trends. This chapter summarises key trends with links to major public data sources. The purpose of highlighting these trends is to shed new light on several issues that readers broadly know of but often misinterpret or miss the point of. Age distributions (population pyramids), fertility, life expectancy, old-age dependency ratios, migration rates, gender ratios, etc.