What is the Baby Boomer Age Wave Theory?

Baby Boomer Age Wave Theory refers to an economic theory that suggests that the economy will peak or culminate in markets and also consumer spending as the generation of Baby Boom aged. Coined by an economist named Harry Dent, and based on his discovery that consumer spending habits reach the peak at 50 years, this theory opines that European and U.S. markets will peak from 2008 to 2012, as Baby Boomers got to 50 years. 

Back to: ECONOMIC ANALYSIS & MONETARY POLICY

Where did the Baby Boomer Age Wave Theory Originate?

Baby Boomer Age Wave Theory, which economist Harry Dent first described, suggests that an economic peak in European and U.S. markets will occur from 2008 to 2012, as the Baby Boom Generation's last members reached age 50. Baby Boomer Age Wave Theory depends on Dent's discovery that consumer spending habits peak at the age of 50. While cultural critics and economists keep on debating the authenticity of Baby Boomer Age Wave Theory, as well as, its effects, the Baby Boom generation effects have had a clear and major impact on both cultural and economic trends in the United States and around the world. As there is a continuous movement of the Baby Boom population into retirement age, economists anticipate seeing a decline in overall consumption, as well as, an increase in demand for services like retirement planning, caretaking and estate, and products for the old. Expectations increase that this shift would, in turn, affect interest rates, real estate, stock prices, inflation, and other economic factors. Certain forecasts expect the U.S. economy to continue slowing down until the next generation, often called Generation X, gets to its spending peak around the year 2022. Ken Dychtwald, being a psychologist and entrepreneur, developed the Age Wave concept and it was the major thesis of his 198o book titled Age Wave: The Challenges and Opportunities of an Aging American. Age Wave focuses on observing the cultural shifts brought about by the union of 3 major demographic forces, including: The Baby Boom: A rise in fertility rates in Canada, United States, Australia, and Europe, in the mid-20th century. While certain analyses differ, the Baby Boom generation is usually identified as part of those born between 1946 and 1964. Elongated longevity: Life expectancy had a significant increase during the 20th century as a result of advances in public health, medicine, and nutrition. The Birth Dearth: Following the Baby Boom, there was a sharp drop in fertility rates, and sub-replacement fertility rates are now occurring in various parts of the world. This theory suggests that as a result of the Baby Boom generation size and tendencies, this population was capable of transforming consumer trends, as well as, life stages. Major market shifts across various industries have been associated with the Age Wave, with the inclusion of the effect on the manufacture, as well as, sales of urban homes, gym equipment, minivans, toys, fast food, and SUVs. In 2006, Dychtwald foretold a massive decline in workforce growth in the near term, predicting a little fraction of the workforce growth provided by the Baby Boom generation. 

Related Topics

• What is Government Spending?
• Autonomous Spending
• Autonomous Consumption
• Fiscal Policy
• Expansionary Fiscal Policy
• Contractionary Fiscal Policy
• Progressive vs Regressive Tax
• Marginal Tax Rates
• Proportional Tax
• Trickle Down Theory
• Discretionary Fiscal Policy
• Automatic Stabilizers
• Effects of Discretionary Policy (Interest Rates & Lags)
• Crowding Out Effect 
• National Debt
• Government Borrowing
• Golden Rule
• Ricardian Equivalence
• Balanced Budget - Deficit and Surplus
• National Debt
• Standardized Employment Budget
• Deficit Hawk
• Austerity
• Twin Deficits
• Fiscal Policy and the Aggregate Supply and Demand Curve
• Stabilization Policy
• Robin Hood Effect
• Ricardo Barro Effect
• Automatic Stabilizers
• Standardized Employment Budget
• How Does Fiscal Policy Affect Interest Rates? 
• Crowding Out
• Types of Lag in Fiscal Policy
• Temporary and Permanent Fiscal Policy
• Limitations of Fiscal Policy?
• How Politics Affects Discretionary Fiscal Policy
• Government Borrowing
• National Savings and Investment Identity
• Debtor Nation
• Fiscal Policy Affects Trade Balances
• Twin Deficits
• Exchange Rates Affect Budget and Trade Deficits
• What are the risks of chronic large deficits in the United States?
• How Fiscal Policy Can Affect Trade Imbalances
• Government Borrowing Affect Private Savings
• Ricardian Equivalence
• Fiscal Policy Affects Investment and Economic Growth
• Crowding Out of Physical Capital Investment?
• How Does Government Borrowing Affect Interest Rates in Financial Markets?
• Government Investment in Physical Capital
• Public Investment in Human Capital
• Fiscal Policy Can Affect Technology Development

• Economic Cycle or Business Cycle
• Business Cycle Indicator
• Peak and Trough
• Recession and Depression
• Hard Landing vs Soft Landing
• Economic Bubble
• Boom and Bust Cycle
• Great Depression
• Baby Boomer Age Wave Theory

• Skyscrapper Effect (Economics)
• V-Shaped Recovery
• W-Shaped Recovery
• U-Shaped Recovery
• Kondratieff Wave Cycle
• Contagion
• Feedback Rule Policy
• American Customer Satisfaction Index
• CNN Effect
• Bureau of Economic Analysis
• Business Starts Index
• American Recover and Reinvestment Act
• Abenomics
• Emergency Economic Stabilization Act of 2008
• Commodity Credit Corporation
• Humphrey Hawkins Act

• Real Economic Growth Rate
• Fox-Trot Economy

• Stagnation
• Neoclassical Growth Theory
• Exogenous Growth Theory
• Endogenous Growth Theory
• New Growth Theory - Explained
• Classical Growth Theory - Explained
• Real Economic Growth Rate - Explained
• Plutonomy