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. 

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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

• Boom and Bust Cycle
• Great Depression
• Baby Boomer Age Wave Theory