Abel, Andrew B2023-05-222023-05-222001-01-012016-05-25https://repository.upenn.edu/handle/20.500.14332/34526General equilibrium models that predict a reduction in asset prices when baby boomers retire typically assume that people consume all of their wealth before they die. However, many people hold substantial wealth when they die. I develop a rational expectations, general equilibrium model with a bequest motive. In this model, a baby boom increases stock prices, and stock prices are rationally anticipated to fall when the baby boomers retire, even though consumers continue to hold assets throughout retirement. The continued high demand for assets by retired baby boomers does not attenuate the fall in the price of capital.© 2001, MIT Press. Originally published in The Review of Economics and Statistics, November 2001, 83(4): 589–595. Journal homepage: http://www.mitpressjournals.org/loi/rest.Finance and Financial ManagementManagement Sciences and Quantitative MethodsArticle