"Historical data indicate a strong relationship between the age distribution of the U.S. population and stock market performance. A key demographic trend is the aging of the baby boom generation. As they reach retirement age, they are likely to shift from buying stocks to selling their equity holdings to finance retirement. Statistical models suggest that this shift could be a factor holding down equity valuations over the next two decades."
The authors, and estimate an error correction model for the p/e ratio and the M/O ratio and then use this model for forecasting the p/e ratio. The details are in their paper. The M/O ratio is the middle-age cohort, age 40–49, to the old-age cohort, age 60–69.
It is hard to argue with demographics.