CHAPTER 2

Literature Review

2.1 Introduction……………………………11
2.2 The Thematic Literature Review……...11
2.2.1 Theme 1 - Demographic Transition
and Economic Growth...…...……..12
2.2.2 Theme 2 – Demographic Transition
and Stock Markets………………...26
2.2.3 Theme 3 – Demographic Transition
Economic Growth and Stock
Markets…………………………....32
2.3 List of Books……………..………….....35
2.4 Research Gap…………………………..37
 Thematic References…………………...38
 Chapter 2
Literature Review

2.1 Introduction
It is truly said that “well begun is half done” (Aristotle). For any research to be
qualitative, once the research area is finalized it‟s the review of literature which sheds
light on what all allied research work has been done in the related field, what theories
and data are used and available. It is through the literature review that a researcher
gets clarity of thought of how the research will go about, what can be done and what
would be the possible outcomes. Keeping this in mind a total of 145 literatures, in the
form of research papers, research articles and books was collected and from them 106
which include books were finalized. Since this research consists of revealing the
impact of demographic transition on economic growth and also on stock markets and
studying the interrelationships between them; the literature is first thematically
divided into three parts and further each theme reviews the concerned literature
chronologically.

2.2 The Thematic Literature Review

Theme 1 Theme 2 Theme 3

• Demographic • Demographic • Demographic
Transition and Transition and Transition
Economic Stock Markets Economic
Growth • It's denoted by Growth and
• It's denoted by DTSM Stock Markets
DTEG • It's denoted by
DTEGSM

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2.2.1 Theme 1 - Demographic Transition and Economic Growth

Cobb and Douglas (1928) establishes the relationship between labour and capital
inputs and the production output using the specific Cobb-Douglas form with constant
returns to scale for various manufacturing units of U.S. They have defined the Cobb-
Douglas model which has created a landmark in the theory of production. They have
given the methodology of estimating the parameters of the production function, using
method of Ordinary/ Classical Least Squares. (Cobb & Douglas, 1928)

Blacker C.P. (1947) in the article titled “ Stages in Population Growth‟ has observed
that demographic cycle have five phases they are; high stationary, early expanding,
late expanding, low stationary and diminishing. High stationary phase is marked by
high birth rates and high death rates. Early expanding stage is marked by high birth
rates and low death rates. Late expanding phase is marked by declining birth and
death rates. Low stationary phase is marked by low birth and death rates. The last
phase is actual excess of deaths over births. (Blacker, 1947)

Farell (1957) has attempted to measure the productive efficiency for the agricultural
sector of U.S.A. using concept of efficient production frontier. He has classified the
productive efficiency into two categories namely Technical Efficiency and Allocative
Efficiency. The study attempts to estimate the technical efficiencies of various states
of America using the relationship between different factors of agricultural production
and its agricultural yield as represented by Cobb-Douglas Production model. (Farell,
1957)

Aigner and Chu (1968) attempted to estimate the Cobb-Douglas production frontier
using state wise data of U.S. Primary metal industry, using Linear Programming and
Quadratic Programing approaches. These estimators have found to be Maximum
Likelihood Estimations (MLE‟s) for Exponential and half normal distributions.
(Aigner & Chu, 1968)

Timmer (1971) has applied Linear Programming techniques to estimate a Cobb

Douglas frontier for U.S. agriculture. He estimated both deterministic and

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probabilistic frontiers and compared the results with ordinary least squares and
analysis of covariance estimates. He defined technical inefficiency in relation to
probabilistic frontier model. (Timmer, 1971)

Afriat (1972) has given the methodology for efficiency for estimation of production
functions through a parametric approach as a convex hull with monotonicity
properties. He has defined the concept of P-consistency with regards to various
properties of production frontier model. He has given the concepts of cost efficiency
and cost efficacy on output and inputs. (Afriat, 1972)

Richmond (1974) has evaluated the average efficiency of Norwegian manufacturing

industries using Cobb-Douglas production frontier. He assumes Gamma Distributions
for the random errors. He has used the approach suggested by Afriat (1972) in order
to estimate the production frontier. (Richmod, 1974)

Aigner, Lovell and Schmidt (1977) have formulated Stochastic Production Frontier
Model, extending the work of Aigner and Chu (1968), where they have suggested to
divide the error component into two parts, one representing the symmetric
disturbances which are assumed to be independently and identically normally
distributed and the other part to be the negative error component which follows
truncated above normal distribution at zero. (Aigner, Lovell, & Schmidt, 1977)

Chu S. (1978) reviewed the methodologies of estimating the parametric frontier

production functions. He has reviewed the least square estimation and maximum
likelihood estimation of production frontiers. He has suggested the programming
methodology and simulation studies to be a more relevant tool rather than the
classical approaches of least squares and maximum likelihood for estimating
production frontiers. (Chu, 1978)

Greene (1980) attempted to estimate the production frontier using Cobb-Douglas

model by the method of Maximum Likelihood Estimation (MLE). He used two
parameters Gamma Distribution for random errors in order to establish its likelihood
function. He has also compared the parameter estimates of the production frontier as
obtained by various deterministic and stochastic approaches for Frontier estimation.
(Greene W. H., 1980)

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Forsund, Lovell and Schmidt (1980) have attempted a survey of the various
production frontier models and explained how they lead to efficiency measurement.
He has critically evaluated various approaches to frontier estimation as given by
various authors along with their advantages and limitations. Finally they have
suggested that the best frontier model is the one with suites best to the empirical data.
Thus the real test of frontier models relies upon how well they suite to a given data
set. (Forsund, Lovell, & Schmidt, 1980)

Leff N. (1984) article is an „another look‟ , a critical comparison between the paper he
had earlier published in 1969 in The American Economic Review and a similar kind
of research/ on the same lines done by Rathi (June 1982) using more cross section
data of international countries. Both Leff and thereafter Rathi have studied the
linkages between Dependency Rates and Savings. In this article Leff have very
judgmentally analysed his savings equations (some other also are considered) which
have been enhanced by Rathi Ram. However they both have established a relationship
between demography and economic growth by observing that savings are inversely
related to demographic dependency rates. (Leff, 1984)

Modigliani F. (1985) has conducted a review based study on the individual and
national Life Cycle Hypothesis with special reference to the savings behavior of
individuals which helps to create the wealth of nations in the long run. His review
dates back thirty years when he and Brumberg in 1952 and 1954 had written essay‟s
on the same topic. From that time till date, various researches was done, all these have
been critically and systematically reviewed in this paper by Modigliani himself.
(Modigliani, 1985)

Chesnais J (1990) has observed in the research that the demographic transition is the
process of modernization of the reproductive behavior in human populations. It is
further observed that the first stage of this process is mortality decline, the second is
fertility control. The main objective of the research study is to analyse the impact of
the patterns of demographic transition on the variation in the size of broad age groups.
The further motive was to give a decomposition of the population multiplier by age,
in particular for the young and the elderly. (Chesnais, 1990)

Barlow (1994) while studying the relation between Population Growth and Economic
Growth has observed that, there is no significant relationship between the two

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variable rate of population growth and rate of per capita income. The two variables
don‟t influence each other so it can be said that rapid economic development is not
caused due to slower population growth. It has been further observed that a third
variable; lagged fertility, is added to the model and the result is the correlation
between lagged fertility and economic growth is significantly positive. (Barlow, 1994)

Gowariker V (1994) his study purely deals with the concept of demographic
transition and its phases with reference to India. He very lucidly talks about the
various demographic indicators affecting the demographic transition theory. He says
that high birth rates and declining death rates signify the first phase. Here the crude
death rates will decline with no significant decline in the birth rates. Population
increases due to the natural growth rate increases. Further he says that after the natural
growth rate reaches a peak, the birth rate begins to decline. Once the natural growth
rate begins to decline, the birth will decline faster. The natural growth rate declines at
a very faster pace and ultimately becomes zero. (Gowariker, 1994)

Pandya Hemal (1996) has attempted to estimate deterministic and stochastic

production frontiers using Cobb-Douglas production function for Indian industries. In
order to estimate the technical inefficiencies of Indian industries, classical and
Bayesian approaches to estimate the Cobb-Douglas production frontier have been
adopted. Three different frontiers have been estimated using Gamma distribution,
Exponential distribution and Stochastic Frontier Technique as suggested by Aigner
and Chu. (Pandya H. B., 1996)

Bloom and Williamson (1997) in their research study of Demographic Transitions

and Economic Miracles in Emerging Asia have observed that a change from high
rates of mortality and fertility to low rates of mortality and fertility has been intense in
East Asia as compared to other region. They have further observed that has so
happened because the working age population grew much faster as compared to
elderly population. It is further resolved that population growth has a purely
transitional effect on economic growth. (Bloom & Williamson, 1998)

Crenshaw, Ameen and Christenson (1997) they had undertaken a cross-national

study of 75 developing countries to investigate the relationships between economic
development and age-specific demographic growth rates from 1965 to 1990. They
have used multiple regression models to study the impact of annual average

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percentage change in real gross domestic product per capita on various age specific
population growth rates, specifically total population and labor force growth rates.
Their investigation revealed that an increase in the adult populations helps in
economic development whereas the economic progress is hindered by an increase in
the child population. In their final conclusion they say that the major effect of
demographics on economies is a one–time offshoot of the demographic change.
(Crenshaw, Ameen, & Christenson, 1997)

Higgins (1998) has tried to study the relationship between current account balance,
demography and national income. In the study the use of econometric investigation of
the links for 100 countries between their national age distribution, savings and
investments rates has been done. Cross section data has been used for this study. The
result of the study indicates that demography plays a very important role in
determining current account balance due to differential effects on savings and
investment. He has been further concluded that this effect is likely to increase in times
to come. (Higgins, 1998)

Barlow (1998) in his research conducted econometric investigation to study

Demographic Influences on Economic Growth for the period 1968 to 83. He has
developed a model from a data of around 85 countries which expresses output growth
as a function of variables. The variable may be either demographic like fertility, rate
of immigration and absolute size of population or non-demographic like production
for export, human capital embodied, terms of trade, reduction in political violence.
The primary finding of the study is that in short run output growth reduces due to
higher fertility but in long run it rises. (Barlow, 1998)

Kelley & Schmidt (1999) in their paper have provided an extensive in-depth
comparative review of a wide variety of literature already available in this field of
economic-demographic modeling. They have built a state of the art Core economic
and political model of economic growth. Further, they have evaluated the merits of
alternative specifications to expose the impacts of demographic change. In their
exploratory study, they arrive at a quantified judgment that demography has a very
promising impact on economic growth. Being more specific they reveal that declines
in both mortality and in fertility have notably increased the rate of economic growth.

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For arriving at these conclusions they have studied eight models which include Barro
and KS Models. (Kelley & Schmidt, 1998) and (Jokhi & Pandya, 2016)

Lindh & Malmberg (1999) has studied the effects of log age group shares (15–29,
30–49,50–64, and 65+) on five-year growth rates in GDP per worker using a sample
of OECD countries (1950–1990). They find significant and positive coefficients for
the age group 50–64 and significant and negative coefficients for retirees (65+).
(Lindh & Malmberg, 1999) and (Jokhi & Pandya, 2016)

Bloom, Canning and Malaney (1999) have conducted a study to observe the
linkages between Demographic Change and Economic Growth in Asia during 1965 to
1990. It has been observed that economic growth is barely affected by the overall rate
of population growth. The variables that affect and impact the economic growth are
population density, population life expectancy, population age structure and fertility.
It has been concluded that demographic transition can be regarded both as an
accelerator mechanism and as a catalyst. It has been suggested that income and
demography are moderately covered by a multiplier mechanism. (Bloom, Canning, &
Malane, 1999)

Attanasio and Violante (2000) have conducted a study on The Demographic

Transition in Closed and Open Economy: A Tale of Two Regions. Their study is
based upon a model which evaluates how falling mortality and fertility rates affects
wages, interest rates and output in regions of US, Europe and Latin America. They
have studied and quantified the effects of the demographic transition on factor returns
and how it will affect the people living around during the transitional period.
(Attanasio & Violante, 2000)

Lee, Mason and Miller (2000) have conducted a study on Life Cycle Saving and the
Demographic Transition: The Case of Taiwan. They have used cross national,
regression, regressions on household-level survey data and simulations based on
assumed behaviour as methods for deriving implications of savings over the
transition. It has been concluded that during the transition, the demand of wealth is
going to increase considerably and significantly. Life cycle saving is an integral part
of it and there will be a substantial rise in saving rates during demographic transition.
(Lee, Mason, & Miller, 2000)

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Bloom, Canning and Sevilla (2001) explore the concept of age structural changes
and economic growth. They have considered both demographic and economic
variables like age, income, consumption, labour supply and savings. They discuss that
in countries where the morality and fertility rates are beginning to fall (South- central
Asia) the government has the advantage of capitalizing on this demographic
transition. Further they reveal that when the number of working age adults grows
relatively larger than the dependent population there is a great potential for a major
economic outgrowth. Their study discloses that population growth has a large and
statistically significant negative effect on per capita income growth but if only the
economically active population share over years is considered along with Per capita
income growth, then it has a statistically significant positive effect. They conclude
that as the proportion of workers rise or fall, it does affect the prospects of economic
growth. (Bloom, Canning, & Sevilla, 2001) and (Jokhi & Pandya, 2016)

Ahlburg (2002) has conducted a review essay on Does Population Matter? It has
been observed that age structure takes a center stage in finding the effects on
economic growth and development. Age structures have an impact on savings and its
role in the economic miracle. Poverty tends to increase and economic growth will
tend to decrease with population growth. If population is controlled then as an effect
the working population will be a demographic-gift, which in turn will lead to a spur in
the economic growth. (Ahlburg, 2002)

Navaneetham (2002) has conducted a study on Age Structural Transition and

Economic Growth: Evidences from South and South East Asia. The researcher has
attempted to find how the changes in age structure effects the economic growth by
using time series analysis for a period from 1950 to 1992. The study is based on
macroeconomic variables like inflation rates, investment share of GDP, share of
public consumption expenditure etc. It is further observed that rate of population
growth negatively influenced the economic growth rate. The countries having open
economic policies will have positive impact of economic growth during demographic
transition. It has been finally concluded that there will be a rapid economic growth if
age structural dynamics are properly incorporated while framing the macroeconomic
policy of any country. (Navaneetham, 2002)

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Lee R (2003) studies demographic transition three centuries of fundamental change
from 1800 to 2100 for Europe. He reveals that the European total population had a
nine fold increase. It is further observed that the average length of life increases by a
factor of two or three, and the median age of the population doubles, from the low 20s
to the low 40s. It is further observed that parents reduced fertility was seen as they
were willing to invest more in one child. Mortality decline may permit less healthy or
more disabled people to live longer, thereby raising age-specific disability rates. (Lee,
2003)

Srinivasan (2004) gives an overview about the Indian population and its development
from 1947 onwards that is after India‟s independence from the British raj. He has
studied the trends of demographic variables; population size, growth, crude birth and
death rates, infant mortality rates for overall India and also with relations with various
individual states of India. Trends of economic indicators; gross national product, per
capita net national product, literacy rates of females and human development value
and ranks have been studied. The analysis is conducted using rank order correction
matrix, for the big states with respected to their developmental indicators. For this
study the above listed variables of both demographic and economic nature are used.
Overall he concludes that economic development is facilitated by the positive changes
in the age distributions and the development of various Indian states depends on the
government‟s development policies and investment patters of their citizens, which
will boost economic growth. (Srinivasan, 2004)
Mason Andrew and Lee Ronald ( 2004) in the article titled „ Reform and Support
Systems for the Elderly in Developing Countries Capturing the Second Demographic
Dividend‟ has observed that many third world countries are facing the population
aging in the coming decades. Sustaining strong economic growth and establishing
effective economic support system are the two major challenges faced by all. It has
been further observed that demographic transition can provide two further
opportunities, one is dividend arises because of the rapid growth of the productive
population relative to the consuming population and second is dividend will not be
realized, however, if old-age security relies on transfer systems. (Mason & Lee,
2004)

Galor (2004) in the article titled „The Demographic Transition and the Emergence of
Sustained Economic Growth‟ has observed that demographic transition is regarded as

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the prime force in the transition from stagnation to growth. Due to demographic
transition the unprecedented population growth was reversed and which brought
significant reduction in the fertility rate. He has proposed various mechanisms as
possible initiates for the demographic transition, assessing their empirical validity,
and their potential role in the transition from stagnation to growth. (Galor, 2004)

Wang C (2005) in the article titled „Institutions, Demographic Transition and

Industrial Revolution: A Unified Theory‟ has observed the process from epoch of
Malthusian stagnation to a state of sustained economic growth. Rise of the saving
rate, three phases accompanying demographic transition, human capital accumulation,
bimodal distribution of income per capita are the factors highlighted in the article.
Historical evidence from ancient China and Britain during Industrial Revolution are
employed to investigate the problem. (Wang C. , 2005)

Batini, Callen, & McKibbin (2006) have examined the economic consequences of
demographic transition for Japan, the United States, other industrial countries of
mainly Europe, and developing regions of the world. They have used a four-country
version of the MSG3, a special form of g cube model and dynamic inter-temporal
general equilibrium model extended with an OLG (over lapping generations)
Blanchard approximation. Their major findings reveal that the population aging in
industrial countries will reduce growth, beginning in Japan in the next decade and
then the rest of the other industrial countries by the middle of the century. Their study
divulges that as the relative size of their working-age populations increases,
developing countries will enjoy a “demographic dividend” that should result in
stronger growth over the next 20–30 years, before aging sets in. Demographic change
will thus affect saving, investment, and capital flows, the rapidly aging industrial
countries could see large declines in saving and deterioration in their current account
positions as the elderly run down their assets in retirement. (Batini, Callen, &
McKibbin, 2006) and (Jokhi & Pandya, 2016)

Mason A and Lee R (2006) have conducted a study to understand actually what
demographic dividend is. They reveal that it is the transition from a largely rural
agrarian society to urban industrial society. Labour force grows and other things being
equal, the per capita income grows more rapidly. The first dividend period is quite
long and it will last for around five decades. They have further observed that second

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dividend is also possible with older working age trying to accumulate for the
retirement time. The first divined yields to a transitory bonus and the second dividend
makes it into bigger assets and wealth creation leading to sustainable development.
(Mason & Lee, 2006)

Prskawetz, et al.(2007) in their report, they have reviewed the literary links between
demographic structures to economic growth. They have introduced three empirical
growth regressions for the European Union-15 countries. Their research data spans
from 1950 to 2005. Further they have chosen one of their own empirical estimations
to conduct a prospective analysis of the future implications of demographic change on
economic growth for up 2050. In their study they have studied and analysed GDP per
Capita, growth rates of the working age population, growth rate of output per worker,
change in the different age groups of the population over the years along with
dependency ratios. Correlation, robustness, Regression models and Sensitivity
analysis forms the basis of their analysis. Finally they conclude that demographics
play a very vital role in the economic growth of any country, in fact they stress that
demographic factors are much more important and influential even compared to
technological, innovation and institutional changes. (Prskawetz, et al., July 2007) and
(Jokhi & Pandya, 2016)

Roy and Aggarwal (2009) have conducted a study on A Demographic Perspective of

Economic Growth. In their study they have tried to examine the linkages between
demographics, labour force and GDP growth for selected countries like US, UK,
Japan, France, South Korea and Turkey. It has been observed that understanding past
growth patterns provides guidance for an appreciation of the effects of demographics
on GDP growth. It is further concluded that for any country to achieve a stable GDP
growth plan they have to meticulously look into their tax policies, labour market
flexibility, immigration policies and legislative actions. (Roy & Aggrawal, 2009)

Lewis B (2010) studies are based on Indonesian demographics and urbanization and
its impact on economic growth. Their examination spans for a period of forty seven
years i.e. 1960-2007. The analysis shows that economic growth has a positive
relation with the level and the rate of change of the working age population and also
with the level of urbanization. For this analysis they have used the VEC Model
(Vector Error Correction) since it permits the variables of interest to be treated as

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endogenous. They have also used the Dickey-Fuller test, which is a variety of
univariate test to check the stationary properties of variables. (Lewis, 2010) and
(Jokhi & Pandya, 2016)

Kumar U (2010) observed that age structure and its dynamics are very critical points
to be considered and understood. He has conducted the research for India, with a state
level perspective on demographic transition and tried to investigate whether it is an
advantage or misery. It has been observed that BIMARU states are slow growing
states and have performed poorly on accounts of social and physical infrastructure are
likely to see a continuing increase in the share of working-age population in the total
population share. The researcher has tried to study the impact of population growth
on country‟s growth prospects. He concludes that the demographic dividend and the
advantageous growth prospects from it depend on the ability of the performance of
the BIMARU states in particular. (Kumar U. , 2010)

Munro and Zeisberger (2011) have used a very interesting concept of „The Ratio of
Revolution‟. On the basis of data relating to Egypt, China, Japan and the U.S. they
reveal that with the help of the Ratio of Revolutions (Y/ JM), a nations forthcoming
revolution with relation to high inflationary trends and high levels of unemployment
can be predicted more than a decade in advance. This demographic ratio is calculated
by dividing the number of Youth (Y) population of age 15 to 29 years, by the Job-
Makers (JM) of age 30 and 44. They interpret that when, the ratio Y/JM is <1 there is
labor shortage, thus there is no unemployment. On the other hand when the ratio of
revolution is between 1 and 1.2, it indicates low unemployment and when the ratio is
between 1.2 and 1.4 it directs increasing joblessness /unemployment, leading to
revolts in the society. (Munro & Zeisberger, 2011)

Agrawal (2011) in his report of only nine pages has analysed the demographic trends
in key economies like (U.S., U.K., and B.R.I.C.S.) going forward and assess the
impact it could have on their economic prospects. He focuses on how demographics
pressures could obstruct in the recovery of the advanced economies from the 2007
recessions they faced. This report studies the Impact of Demographics on both
developed and developing economies. In their concluding remarks of their report they
say that, “ignoring demographics might not look like a concern over a short-term but
could pose serious concerns over long-term. One can still work around to mitigate

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inflation but with demographics even that cannot be done as it would require huge
investments” (Agrawal, 2011). And (Jokhi & Pandya, 2016)
Canning and Rosenberg (2011) have undertaken a study to analyse the links
between Demographic Change and Economic Growth in South Asia. It has been
observed that changes in age structure will generate prospective for rapid economic
growth. The ratio of working-age to non-working age people is very relevant. If the
ratio increases then the demographic dividend will tend to increase resulting in rapid
economic growth. Sound macroeconomic management is a key to that. (Bloom,
Canning, & Rosenberg, 2011)

Bloom (2011) in his discussion paper talks about the population dynamics of India
and China with the main emphasis on India. The variables under study are growth
rates of economically active population, growth rates of total population, working and
non-working age groups growth rates and the average annual growth rate of the real
GDP per capita is studied. Through the study it is clearly revealed that if the
economically productive population, which forms a good proportion of the population
as a whole, is employed productively over the years then, the economic growth stands
a very bright future. Several related studies and its literature are also discussed here.
(Bloom D. E., 2011)

Bloom (2011) in the article titled “India‟s Baby Boomers: Dividend or Disaster?” has
observed that India‟s population has tripled during the years 1950 to 2010 and it is a
matter of a big concern. As a result India will not come out of the poverty trap and
this will slow the growth. It has been further observed that India‟s population is aging
and 60 plus population is expected to be more than triple in the next four decades. The
difficulty of these tasks underscores the importance of taking advantage of the
opportunities afforded by India‟s demographic trends. (Bloom D. E., 2011)

James K.S. (2011) in the article titled „India‟s Demographic Change: Opportunities
and Challenges‟ has discussed issues regarding emerging demographic patterns and
its opportunities and challenges for India. Specificities in the demographic transition
are investigated. Due to demographic change, some opportunities will arise to
overcome labour shortage. Some serious challenges like skewed sex ratio, social and
political unrest are highlighted in the study conducted. (James, 2011)

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Roy, Punhani and Shi (2012) in their study to examine how demographics influence
economic growth has observed that favorable demographics have contributed to
Asia‟s growth promise. They have conducted study on eight different and diverse
countries with respect to pace of ageing and age structure like China, Hong Kong,
India, Japan, Malaysia, Republic of Korea, Indonesia and Singapore. The variables
considered for the study are fertility, mortality, age structure, patterns of population
growth, life expectancy etc. It has been further concluded that a country‟s economic
performance is affected because economic behaviour and needs of people vary at
different stages of life. (Roy, Punhani, & Shi, 2012)

Bhutto, Dayo, Butt, Lohach and Birjani (2012) have conducted a study on
Demographic Transition: Analysing Effects of Mortality on Fertility in Low Middle
Income Countries. The researchers have tried to analyse the empirical relationship and
impact of infant mortality, life expectancy and crude mortality on fertility during
transitions. It is concluded there is insignificant impact of crude death rate on total
fertility. The effect and impact of mortality is very large on fertility as compared to
other variables. (Bhutto N. , Dayo, Butt, Lohach, & Birjani, 2012)

Wang, Chen, & Huang (2013) examine the economic and distributional effect of the
demographic transition, which is on-going in China. They have used an integrated
recursive dynamic computable general equilibrium (CGE) model with a behaviour
micro simulation model to measure the income changes due to the demographic
changes. For this they divided the labor force into eight different segments and
considered the demographic transition from 2010 till 2050. They have used both the
FGT index and the Gini coefficient to estimate the poverty and inequality changes due
to demographic transition. Further they used regression based inequality
decomposition with the Shapley value decomposition method to identify the relative
contribution of demographic variable to income inequality. They found that a
significant portion of the decrease in poverty and an increase in inequality is expected
in the context of the multi- demographic transition. (Wang, Chen, & Huang, 2013)
and (Jokhi & Pandya, 2016)

Tyers and Golley (2013) have conducted a study on two demographic giants‟ India
and China. They have tried to study demographic change and economic performance.
The researchers have tried to analyse the demographic transitions and the implications

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of alternative fertility scenarios. They have made a model of exploring the full
demographic behaviour and measures of dependency that include the working aged
and those of working age who do not work. It has been concluded that, within the next
few coming years , China‟s labor force will begin to contract, while that of India will
expand faster than its population and that India‟s dependency ratio is sharply
declining and its higher infertility contributed positively to country‟s GDP. Per capita
income will increase with lower fertility in both the countries, but India will gains
more than China as India has a higher youth dependency as compared to china.
(Tyers & Golley, 2013)

Kinugasa T (2013) has explores the topic on, reaping the rewards of the second
demographic dividend. He infers that demographic dividend plays a very important
role in understanding how population dynamic influence a country‟s economy. Due to
increase in the working age population both the young and old dependents decreases
which is reflected as the first dividend. There on an increase in adult longevity leading
to more savings for the elderly age contributes to capital accumulation and economic
growth is regarded as second dividend. Many countries have experienced a
noteworthy change in the adult mortality rate over time. This rapid increase in
longevity has a remarkable contribution in savings and on GDP. (Kinugasa, 2013)

Hamza (2015) has conducted Panel Data Analysis of Population Growth and Its
Implication on Economic Growth on Developing Countries. The researcher has tried
to investigate the effects of population dynamics on the economic growth. It has been
observed that there is a significant impact on economic growth of developing
countries due to population growth and dynamism. The researcher has used a panel
data econometric analysis of 30 developing countries for a period of 14 years in
explaining the time dimensions of the implications of the rate of population growth
with birth rate, death rate and migration on GDP of the country. It is proved that panel
data econometrics is a more powerful tool of analysis. (Hamza, 2015)

Lee Ronald (2015) in the article titled „Becker and the Demographic Transition‟ has
observed that during 1950 when Grey Becker undertook work on economics of
fertility it was an altogether different era. Becker‟s theory has been highly influential
in shaping the basic understanding of the demographic transition. During the times of
world war there was a great concern about population explosion. Becker‟s work

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mainly addressed the fertility transition facing number of problems for any economic
explanation. (Lee, 2015)

2.2.2 Theme 2 – Demographic Transition and Stock Markets

Modigliani and Brumberg (1954) presented one of the first research done, revealing
a link between asset prices and different phases of the life cycle model. They
developed the life cycle hypothesis which states that a consumer‟s consumption and
saving decisions aim to level consumption during the entire lifespan. The varying
developments in asset accrual and portfolio choices over different stages of a person‟s
life cycle lead to an altering demand-supply patterns for assets, these leads to
fluctuations in asset prices. In simple terms they, provide a theory explaining the
saving and investment behavior of investors during their life span. According to their
theory the productively employed younger individuals tend to save and subsequently
invest in real and financial assets over their period of employment. At the early stage
of employment most of the saving would be directed towards housing, leading to a
rise in real estate prices. At a later stage during the ages of the mid 40‟s and above,
substantial amount of excess saving would be invested in the stock markets. On the
contrary, the old age group, as non-savers and sellers of common stock, tend to
negatively impact its return. (Modigliani & Brumberg, 1954 (Reproduced 2005)) and
(Jokhi & Pandya, 2016)

Morin and Suarez (1983) provide additional empirical evidence to the studies relate
to the effect of wealth and investors life cycle on risk aversion. Their study reveals
that the phase of the investor‟s life cycle plays a very important role in the portfolio
selection behavior. Also risk aversion increases uniformly with age. Their study
investigates the Canadian households demand for risky assets. For this they have used
the analysis of covariance techniques. When the sample and wealth parameters are
modified in accordance to previous empirical studies, their result on relative risk
aversion was upheld and their results supported the existing empirical studies. (Morin
& Suarez, 1983) and (Jokhi & Pandya, 2016)

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Yoo (1994) explores the relation between annual U.S. stock, corporate, and
government bond returns and proportion of total population for age groups 25–34,
35–44, 45–54, 55–64, and 65+. His research is based on the overlapping-generations
asset pricing model and estimates multivariate time-series regressions. The findings
show a negative relationship between short and medium-term government bonds and
age group 45–54. On the other side, the statistical significance is weak for almost all
coefficients in all five age groups. He also estimates the regressions with three and
five-year centered moving averages and finds a significant increase both in terms of
statistical significance and fit. The research concludes that long horizons provide a
better test for low frequency population changes. (Yoo, 1994)

Bakshi and Chen (1994) explored the associations between demographic transition
and asset prices. The population under study was the US population, for the time
period 1900 to 1990. They have tested the life cycle investment hypothesis and later
tested that as the investors age increases, they becomes more risk averse. Their results
show that earning people in the 20‟s and 30‟s first invest in housing facilities and
thereafter as savings accumulate they invest in financial assets. They used average
age, along with consumption growth data, to explain stock and T-bill returns and
found that average age had a significant effect. Their research clearly revealed that the
risk taking behavior of financial investors definitely changes with age and they
become more risk averse and prefer less risky assets as they approach retirement. For
their statistical testing they use Euler equations as well as a two-factor model based on
consumption growth and percentage change in average age. They thus found robust
provisions for their lifecycle risk aversion hypothesis and a statistically strong
positive relationship between, the stock excess returns and growth in the average age
of the population. (Bakshi & Chen, 1994) and (Jokhi & Pandya, 2016)

Jagannathan and Kocherlako (1996) have observed that older people invest less in
stocks as compared to younger people. They have used standard economic models of
investor behavior for evaluating. They have further observed and concluded that the
younger people can safeguard their losses from increased risk as they earn from
wages and salary. Also, due to prolonged stock holding capacity of youngsters and by
assuming that stock returns are identically distributed over time, additional safeguards
against risk is here. As time passes by and age increases, people become risk averse
and so, with the help and guidance from their respective financial advisor, they shift

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financial wealth out of stocks and divert it to bonds. (Jagannathan & Kocherlakota,
1996)

Bergantino (1998) in his research investigates the effect of changes in the population
age structure for the population of U.S.A with relation to stocks, bonds and housing.
The research is based in the post-world war II era. In this research first a survey is
constructed to collect data on household asset holding, in order to construct the age
profiles on demand for a home along with other financial assets. There on to construct
time series measures of aggregate demographic demand for housing and financial
assets, the age distribution data to net of debt and stocks in excess of bonds is pooled
with asset demand profiles. Thereafter it is used to analyse the effects of
demographically compelled changes in aggregate asset demand on equilibrium asset
prices. For this the period from 1946 to 1997 is considered. He found that the
structure and scale of household asset demand changes radically over the entire
economic life cycle. More over the life cycle investment patterns have a very
significant macroeconomic consequence because of the enormous changes in the
population age-structure in the post war era. (Bergantino, 1998)

Poterba (2001) has based his research on the demographics of U.S., Canada and U.K.
With the help of the demographic data the paper investigates the relation between
their population age structure mainly in the age group of 40 to 64 years and the
returns on bonds and stocks. The empirical outcomes of this study suggest that it is
difficult to find a robust association between the age structure of the U.S. population
of around seventy years and asset returns on stocks, bills or bonds. However the
correlations between returns on treasury- bills, long-term government bonds return
and the demographic variables are strong as compared to only stock returns and
population variables. He finally concludes that the changes in the demographic
structure may have only a moderate effect on the asset prices over the coming few
decades. He says that the retired people may not sell their stocks, instead pass on the
wealth of the stock to their heirs or keep it for their own financial consumption
expecting to live longer lives. (Poterba, 2001)

Campbell (2001) commenting on James Poterba‟s paper „Demographic Structure and

Asset Return‟ of 2001; Campbell suggests an alternative approach that is, to consider
the share of risky assets in total asset demand instead of giving lots of importance to

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the total demand for wealth. He suggests a simple benchmark model which reveals
that age has an effect on the share of risky assets. He says that as investor moves
towards retirement, their human wealth declines but, their financial wealth increases.
(Campbell, 2001)

Arnott and Casscells (2003) in their article with reference to the U.S. make known
that, as the life expectancy of the citizens increase, the dependency ratios will also
increase, due to which the average aged person will have to work several years longer
to support the dependents. Since there will be more retired person, who would only be
consumers of goods and services than before, selling assets to a proportionally smaller
roster (who are the workers and suppliers of goods and services) of potential buyers,
will increase pressure on asset values. The senior citizen will rely less on growth
assets and favor fixed income assets. They have taken into consideration various
demographic variables like earlier fertility rates, percentage of population, life
expectancy and dependency ratios in the form of time series data (around 1950-2000
and projections till 2050) and thus proposed several solutions to the demographic
crises which fall into several categories-financial, macroeconomic and demographic.
They finally conclude that out of all the solutions; increasing the retirement age and
liberalizing the immigration policies seems to be the solution which will make a large
difference to the demographic crises affecting the capital markets returns. (Arnott &
Casscells, 2003)

Ang and Maddaloni (2003) used both a long sample from the year 1900–2001 , with
five countries and a short term sample from 1970–2000 with 15 countries to study the
relationship between excess stock returns( equity risk premiums ; at one, two, and
five-year horizons) and log changes in the demographic variables. Using the concept
of pooled regressions, their results display a strong and negative effect for the fraction
of retirees in the population (65+). Interestingly, the authors found an opposite and
positive result in isolated regressions for the United States and the United Kingdom.
A very important result of this paper showed that by pooling data from five countries
gives almost the same power as increasing the sample size of the United States by five
times. (Ang & Maddaloni, 2003) and (Jokhi & Pandya, 2016)

Goyal ( 2004) explores the inter-linkages between various population age structure,
net outflows from the stock market and stock market returns. For this study, he uses

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the Overlapping Generation‟s Model along with the theory of the Life Cycle
Hypothesis. The data analysis is done with the help of multiple regression models,
using data related to the populations of mainly USA. The study reveals that stock
market outflows are positively correlated with changes in the share of old people (65
and over). It further discloses that there is a negative relation between the changes in
the fraction of middle-aged people (45 to 64) and the stock market indicators. Thus
this research supports the fact that demographic transitions do have a significant
explanatory power over stock market returns. (Goyal, 2004) and (Jokhi & Pandya,
2016)

Ameriks and Zeldes (2004) have exploited the question, how household portfolio
shares of U.S. Population fluctuate with age. For this they conclude that according to
their research there is no evidence supporting the fact that as population‟s age, there is
a gradual reduction in the portfolio shares. However a few retired citizens do shift
completely out of the stock markets around the time of withdrawals and
annuitizations. These findings are based on pooled cross sectional data. They have
used data from the surveys of consumer finances and panel data form TIAA-CREF
institute. (Ameriks & Zeldes, 2004)

Geanakoplos, Magill and Quinzii (2004) have tried to study the long run
predictability of the stock market by observing demography as a common thread.
They have observed that the younger people borrow, middle aged people invest and
the elderly people disinvest for safe guarding their retirement. Stock market is a
vehicle that is being used for planning the safe and secured retirement. Their research
model suggest that demographic effect on P.E. ratios is much larger and it further
observed that when the population of savers consist of older people then equity
premium is comparatively smaller. They reveal that demographics do affect stock
markets of the US. Further they suggest taking Middle /Old age ratio to study the
stocks instead of the Middle /Young age ratios. (Geanakoplos, Magill, & Quinzii,
2004)

Tyers R. and Golley J. (2006) have conducted a research study to understand the
roles of demographic change and investment risk in China‟s growth up to the year
2030. It has been observed that China‟s growth is dependent on abundant labor force
and the said labor force is going to decline in the coming decade. They have

- 30 -
developed a global demographic model to explore the linkages of population with
economic growth under alternative assumptions about fertility decline and labor force
growth. (Tyers & Golley, 2006)

Lashgari (2008) explores the degree of relationship between the house hold wealth
profile and demographic age structure through a variety of empirical research done by
scholars from around the world. Through the explorations of various literatures and
on the basis of some statistical data he discusses that as the number of people
approach retirement or has already retired then to have accumulated and retained a
good amount of wealth, both of real estate and financial assets. Various studies based
on the life cycle hypothesis of saving and investment have been explored and on this
base the research finds that demographics have a very small impact on asset prices,
there are several other factors like industrial production which have a great impact on
financial markets. On the flip side, on the basis of several literature mainly based on
the U.S. data, it is seen that the proportion of population share of 40-64 years have
remained stable and it has shown a positive correlations with respect to the changes in
the stock market prices. Also the retired population, 65 and more are not always
sellers, they to retain a good chunk of their financial wealth. Thus he has discussed
very dynamically how common stock prices may react to various changes in the
population age structure of the US. (Lashgari, 2008)

Ohn and Taylor (2009) have conducted a study on Global Demographic Transition
and Stock market Performance for developing and developed countries in regions of
North America, Asia and Sub Saharan Countries. They have tried to study impact of
changes in major workforce between different category ages like 25 to 40 years, 40 to
64 years and above 64 years. They have further observed that demographic transitions
will put some significant pressure on financial markets size and performances in days
to come. The elderly people will have to disinvest for supporting their post
retirements needs inspite of a weak market. (Ohn & Taylor, 2009)

Favero and Tamoni (2010) examine the consequences for the term structure of stock
market risk. They have used the concept of MY ratios that is the middle aged to
young ratio and deviations of the dividend-price ratios for an overlapping generation
model. Further, they have used the dynamic dividend growth model and study the
long-run returns likelihood using demographic and stock market risk variables.

- 31 -
Through this paper they introduce an alternative model which can measure the term
structure of stock market risk. With the statistical tools of regression analysis and
trend analysis they find a steeply downward sloping term structure of the stock market
risk. (Favero & Tamoni, 2010)

Liu and Spiegel (2011) study the past data of population of the US with its stock
performances and find a strong relationship between them. They prefer the M/O ratio
i.e. population of the age 40-49 and 60-69 to the M/Y ratio i.e. Middle age to working
youth of 20-29yrs. They estimated that the M/O ratio explains about 61% of the
movements in the P/E i.e. price /earnings ratio of the S&P 500 from 1954 to 2010 and
concluded that the M/O ratio predicts long-run trends in the P/E ratio fairly well. (Liu
& Spiegel, 2011) and (Jokhi & Pandya, 2016)

Cheng, Lee, Wang and Kuo (2014) have tried to analyse the effect of demographic
transition to capital market. They have observed that population aging is a common
threat not only to advanced countries but also to transition economies and emerging
market economies. Their study is based on 73 countries with respect to
macroeconomic variables like saving rate, investment rate and the current account to
GDP and financial variables like stock & bond return, stock market and bond market
capitalization. They have concluded that population aging decreases saving and
investment rate and there is a positive correlation between population aging and size
of bond market. (Cheng, Lee, Wang, & Kuo, 2014)

2.2.3 Theme 3 – Demographic Transition Economic Growth and

Stock Markets

Bosworth, Bryant and Burtless (2004) discusses the literature on the

macroeconomic and asset market effects of population aging, focusing on four related
issues: (i) The impact of population age structure on aggregate household saving; (ii)
The effect of population aging on investment demand; (iii) Evidence on the influence
of population age structure on financial market asset prices and returns; and (iv)
Effects of globalization on our interpretation of the impact of demographic change. At

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the end of their research they have given good suggestions for betterment of such
related research and also stated avenues for future research. (Bosworth, Bryant, &
Burtless, 2004) and (Pandya & Jokhi, 2016)

Ang, Piazzesi, and Wei (2006) build a dynamic model to know what the yield curve
portrays about the GDP growth. Their study takes into consideration only the
financial market and the macro economy, the demographic angle is not directly
considered. However, the no arbitrage model predicts that the short rate has more
predictive power that any term spread. To measure the slope of the yield curve, they
recommend the use of lagged GDP and the longest maturity yield. (Ang, Piazzesi, &
Wei, 2006)

Attanasio, Kitao & Violante (2006) in their research study have tried to quantify the
effect of the demographic transition in developing economies. They have tried to
analyse the impact of declining mortality and fertility rates, rising female labour force
and inter-generational welfare in developing countries. They have developed a large-
scale two-region equilibrium overlapping generation model. It is further observed that
for less developed regions the demographic trends may depend on the international
capital mobility. Due to fertility transition the developing countries will still benefit
significantly from the demographic dividend. (Attanasio, Kitao, & Violante, 2006)

Naik, Noronha, Gnanasundaram and Kaushik (2006) have conducted a study on

economic indicators from an Indian perspective. Related concepts of stock markets as
an indicator of economic growth are considered in this report. In the course report
they discuss, what is an ideal indicator and further they have illustrated leading
indicators like trends of GDP, Purchasing Power Parity Index, Fiscal deficit, trends in
inflation rate, balance of payments, foreign exchange reserves, Sensex, exchange
rates, savings/GDP ratio, human development index etc. The scope of this report has
been restricted to a few indicators which can qualify as leading indicators of the
Indian economy. (Naik, Noronha, C, & K, 2006)

Maurer (2011) explores the way in which the demographic transitions with special
reference to the USA affect the optimal consumption decisions and asset prices. For
this the overlapping generation‟s model, which features demography uncertainty with
respect to stochastically changing birth and death rates is used. The research suggests

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that the random changes in the birth rates have stronger implications on asset pricing
as compared to the alterations in the death rates. The research takes into consideration
the theories of relative risk aversion and elasticity of inter temporal substitution for
their study. The research paper reveals that because of the demographic uncertainty,
the conditional instability of stock return is also randomly fluctuating. Also as
compared to unconditional variations in aggregate consumption growth, the
unconditional volatility of assets return is very large. (Maurer, 2011)

Arnott and Chaves (2012) they study the effect of demographic changes on three
measures of great importance for countries all over the world: real per capita PPP-
adjusted GDP growth, stock market excess returns, and bond market excess returns.
They have used the concepts of polynomial curve fitting on the regression
coefficients of demographic age groups. Their data spans over 60 years and 22
countries. Their study revealed that the higher GDP growth was associated with
young adult‟s age 20-30 years. With reference to stocks they interpreted that when a
country had a good portion of its population between 35-59 years or even if the age
group of 45-64 years grew at a fast rate as compared to the young adults or senior
who are 70+, the stocks performed very well. In his research they found a strong
relationship between demographic variables, stock and bond returns and the GDP
growth. For this study they used the polynomial curve fitting concept. (Arnott &
Chaves, 2012) and (Pandya & Jokhi, 2016)

Chaves D.B. (2012) studies the influence of demographic transition on the economy
and financial markets of 30 countries like U.S., Japan, Denmark, Spain, Ireland and
China. He has taken into consideration the difference between the share of workers in
the population and the share of retirees. Further the influence of the change in this
difference on the GDP per capita growth is studies. He has also studied the impact of
the difference in the share of population between the potential buyers and sellers on
the stock and bond excess returns. In the article he reveals that developing countries
are experiencing a great change in their demographic structure and this will impact
the economic growth and capital markets in not a very encouraging scenario, if the
past trends are considered. (Chaves, 2012) and (Pandya & Jokhi, 2016)

- 34 -
Cornell (2012) has explored the link between demographics, GDP and Future stock
returns. The researcher has tried to study how the demographics can affect future
economic growth and future stock returns. It is observed that stock returns will be
depressed as baby boomers will try to liquidate their investment to fund retirement
and it is bad for future economic growth and will lead to lower future stock returns.
(Cornell, 2012)

Roy, Punhani and Shi (2012) studied the links between stock and bond process
related variables, economic and demographic variables. They have used regression
analysis and documented robust relations between price earning ratios of stocks and
demographics, though only in the U.S. Their result of regression for the German
Dax‟s P.E.Ratios shows a moderate impact of demographic variables and economic
variable GDP per capita on the stock market indicator. However, they found robust
associations between long term government bond yields and demographic variables of
developed countries of U.S., U.K., Germany, Japan and France. (Roy, Punhani, &
Shi, 2012) and (Pandya & Jokhi, 2016)

2.3 List of Books

Apart from the various research papers and articles discussed above in section 2.2, the
thematic literature review; several books were also refered to get theoretical and
conceptual clarity to understand the research topic is a better way and conduct reliable
analysis. The following is the list of books referred to:

o Fact Book 2014 (20th Anniversary Celebration ed.). (2014). Mumbai, India:
National Stock Exchange of India Ltd. (NSE).

o Aczel, A., & Sounderpandian, J. (2006). Complete Business Statistics (Sixth

ed.). New Delhi: Tata McGraw-Hill.

o Agarwal, V. (2010). Macroeconomics Theory and Policy. Dorling Kindersley

(India) Pvt.Ltd.

o Banerjee, A. (Ed.). (2007). Global Stock Exchanges- The Dawn of a New Era.
Hyderabad: The Icfai University Press.

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o Bloom, D., Canning, D., & Sevilla, J. (2003). The Demographic Dividend: A
New Perspective on the Economic Consequences of Population Change. Santa
Monica: RAND.

o Cauvery, R., Sudha Nayak, U., Girija, M., & Meenakshi, R. (2010). Research
Methodology. New Delhi: S.Chand and Co.Ltd.

o Coale, A., & Hoover, E. (1958). Population Growth and Economic

Development in Low-income countries. Princeton:Princeton University Press.

o Dwivedi, D. N. (2006). Macroeconomics Theroy and Policy. Tata McGraw-

Hill.

o Dyson, T. (2011). Population and Development the demographic transition.

Rawat Publications.

o Gandhi, A., Kumar, C., Saha, P., Sahoo, B. K., & Sharma, A. (2011). India
Human Development Report 2011. (First, Ed.) New Delhi: Oxford University
Press.

o Grant, S. (2012). Economics. New Delhi: Cambridge University Press India

Pvt. Ltd.

o Gupta, G. S. (2005). Macroeconomics Theroy and Applications. Tata

McGraw-Hill.

o Gupta, R. (Ed.). (2014). Resurgent India- The Evolving Story. Hyderabad: The
Icfai University Press.

o Gupta, S., & Kapoor, V. (1999). Fundamentals of Applied Statistics. New

Delhi: Sultan Chand and Sons.

o Kothari, C. (2004). Research Methodology:Methods and Techniques. New

Delhi: New Age International (P) Ltd.

o Kothari, C. R. (2014). Quantitative Techniques (3rd ed.). Vikas Publishing

House,Pvt Ltd.

o Kumar, R. (2012). Research Methodology:A Step by Step Guide for Beginners.

New Delhi: Dorling Kindersley (India) Pvt. Ltd.

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 o Levine, D., Krehbiel, T., Berenson, M., & Vishwanath, P. (2011). Business
Statistics:A first Course (Fifth ed.). Dorling Kindersley (India) Pvt. Ltd.

o Modigliani, F. (2005). The Collected Papers of Franco Modigliani (Vol. 6).

Cambridge: Massachusetts Institute of Technology.

o Pant, K. C. (2003). India's Development Scenario Next Decade and Beyond.

New Delhi: Academic Foundation.

o Premi, M. (2009). India's Changing Population Profile. New Delhi, India:

National Book Trust.

o Phuskele, P. (Ed.). (2014). India and China-Emerging Superpowers.

Hyderabad: The Icfai University Press.

o Rajan, S. (Ed.). (1997). India's Demographic Transition A Reassessment. New

Delhi: MD Publications Pvt.Ltd.

o Sah, A. N. (2009). Data Analysis using Microsoft Excel (First ed.). New Delhi:
Excel Books.

o Singh, P. (2017). Stock and Commodity Markets. Mumbai: Himalaya

Publishing House.

o Stiglitz, J. E., & Walsh, C. E. (2002). Economics (Third ed.). W.W.Norton &
Company.

Based on the literature reviewd and after getting a good clarity of the variouis
concepts through the readings, the following research gap was found.

2.4 Research Gap

Demographic transition of population aging is an emerging issue throughout the
developing world. There has been a great deal of theoretical and empirical research on
the relationship between demographic transition and economic growth for developed
economies like the U.S since 1950s when the population aging emerged to influence
the economy and society. Generally speaking, the literature indicates that the aging of
the population generates negative economy-wide effects that would slowdown the
economic growth. With reference to the relationship between demographic transition

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and economic growth, the empirical results are inconclusive as there is evidence both
supporting a positive and a negative relationship. As the issue of population aging
began to unfold for developing countries, hardly any research was undertaken which
would study the inter-relationship between demographic transitions and its impact on
economic growth and stock market indicators. This research work is an attempt to
study the impact of demographic transition on economic growth and stock markets of
India. The inter connection between economic growth and stock market indicators and
the impact of demographic transition on them with special reference to India was an
untouched area of research, hence this doctoral research is of great significance in our
Indian context.

On the basis of all the literature reviewed and after finding the research gap, the
systematic and logical way in which this research can be conducted is known. The
research methodology adopted for this doctoral research is discussed in the next
chapter.

 Thematic References

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 Agrawal, A. (2011). Demographics: A Game Changer in Global Economic

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 Ahlburg, D. A. (2002, June). Population Matters:Demographic

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 Aigner, D. J., & Chu, S. F. (1968, September). On Estimating the Industry

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 Crenshaw, E., Ameen, A., & Christenson, M. (1997). Population Dynamics

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 Farell, M. (1957). The Measurement of Productive Efficiency. Journal of

Royal Statistical Society, 120(3), 253-290.

 Forsund, F. R., Lovell, C. A., & Schmidt. (1980). A Survey of Frontier

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 Gowariker, V. (1994, December 3). Demographic Transition in India.

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 Greene, W. H. (1980). Maximum Likelihood Estimation of Econometric

Frontier Functions. Journal of Econometrics, 30, 27-56.

 Hamza, L. (2015). Panel Data Analysis of Population Growth and it

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 Proceedings of the International Symposium on Emerging Trends in Social
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 Higgins, M. (1998, May). Demography, National Savings and International

Capital Flows. International Economic Review, 39(2), 343-369.

 James, K. (2011). India's Demographic Chnage: Opportunities amd

Challenges. Science, 576-580.

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