The ratios for Ireland and Spain have almost the same time profile; they peaked around 2005, which corresponds to the peak of their property bubbles (Fig. 2). The ratio for Greece and Portugal peaked around 2000. The significant point for us here is that the financial crisis we have experienced has coincided closely with the turning point in these demographic dynamics.
Asset price bubbles: dancing over the tide of fundamentals The “life-cycle” theory, or more precisely speaking, overlapping generation models suggest that demographic change is one of the most forceful drivers of asset prices.