China Is Ending Its "One-Child Policy" - Here Are The Implications

"Back in 1978, the Chinese politburo enacted the "one-child policy", whose main purpose was to "alleviate social, economic, and environmental problems" in China as a result of the soaring population. According to estimates, the policy prevented more than 250 million births between 1980 and 2000, and 400 million births from about 1979 to 2011. And while not applicable to everyone, in 2007 approximately 35.9% of China's population was subject to a one-child restriction."

"Such an unprecedented pace of aging poses big challenges to China’s pension system. Traditionally, Chinese families have largely relied on their children after their retirement. However, after a 30-year enforcement of the one-child policy, every only-child will need to support two parents and four grandparents, which is likely to be too much of a burden. The retirees will have to depend on the national pension system. China needs to quickly catch up its pension system coverage to ensure social security, as currently only about a third of the population is covered. Furthermore, how to finance the pension system remains a big question as China’s labor force shrinks."

http://www.zerohedge.com/news/2013-08-04/china-ending-its-one-child-policy-here-are-implications

Why Japan Is Bad For The World

"Japan continues to be the world’s biggest financial story. The consensus seems to be that the country’s extraordinary economic measures are good for both itself and the world. I’ve detailed previously how Japan’s efforts are likely to have terrible domestic economic consequences, whether they succeed or not. Today, I’m going to explore the latter idea: that Yen depreciation will benefit other countries as they’ll depreciate their own currencies, which will make their economies more competitive too. This idea, put forward by some serious financial commentators, is laughable as it ignores both history and any sense of simple logic. The implications are worth exploring though as competitive currency devaluations have already begun and are likely accelerate from here."

http://asiaconf.com/2013/05/17/why-japan-is-bad-for-the-world/

Demographic Changes, Financial Markets, and the Economy

"Using a large sample of countries and 60 years of data, the authors found a strong and intuitive link between demographic transitions and both GDP growth and capital market returns. Unlike previous researchers, who used ad hoc and restrictive demographic variables, the authors imposed a smooth and parsimonious polynomial curve across all age groups. They also performed robustness checks and produced forecasts for the coming decade, with all the necessary caveats."

http://www.cfapubs.org/doi/pdfplus/10.2469/faj.v68.n1.4