Age wave
Encyclopedia
In the economics
of demography
, the term spending wave refers to the economic effect of departure of children from the home. When a society experiences a high level of such family change then an economic decline follows from reduced spending overall.
For example, in U.S. contemporary economics, Harry Dent
, a University of South Carolina
and Harvard Business School
graduate and Fortune 100 consultant, has popularized the baby-boomer spending wave theory. According to Dent , the stock-market decline of 2008 was a result of baby boomer
s aging past their peak spending years. This prediction was based on the observation that consumer
spending peaks near age 50. In 2002 Dan Arnold echoed this theory in his book The Great Bust Ahead
, with the big spenders being 45-54 year olds, and their numbers peaking in 2011-2012.
Other authors, such as Schieber and Shoven, suggest that the gradual peaking of the social security trust fund in the United States will occur around the 2007-2009 time period.
Some experts expect the worst consumer recession, since 1980, to occur when aging boomers start retiring, adding to rising unemployment, decline in house values
, and declining stock prices. However other experts have suggested that immigration to the US
and the rise of emerging economies will offset the baby boomer demographic impact. Still other experts have postulated, that due to the 2008 major stock market decline and home equity crash, that many baby boomers will have lost so much equity that they will retire at a later age than was previously planned.
It has been argued that during 2008-2032, US will experience the highest population growth, whereas in Japan the population will decline. Thus demographically US may represent better prospects for the stock market.
Economics
Economics is the social science that analyzes the production, distribution, and consumption of goods and services. The term economics comes from the Ancient Greek from + , hence "rules of the house"...
of demography
Demography
Demography is the statistical study of human population. It can be a very general science that can be applied to any kind of dynamic human population, that is, one that changes over time or space...
, the term spending wave refers to the economic effect of departure of children from the home. When a society experiences a high level of such family change then an economic decline follows from reduced spending overall.
For example, in U.S. contemporary economics, Harry Dent
Harry Dent
Harry S. Dent, Jr. is an American financial newsletter writer. His latest book, The Great Depression Ahead, appeared on the New York Times Bestseller List.-Biography:...
, a University of South Carolina
University of South Carolina
The University of South Carolina is a public, co-educational research university located in Columbia, South Carolina, United States, with 7 surrounding satellite campuses. Its historic campus covers over in downtown Columbia not far from the South Carolina State House...
and Harvard Business School
Harvard Business School
Harvard Business School is the graduate business school of Harvard University in Boston, Massachusetts, United States and is widely recognized as one of the top business schools in the world. The school offers the world's largest full-time MBA program, doctoral programs, and many executive...
graduate and Fortune 100 consultant, has popularized the baby-boomer spending wave theory. According to Dent , the stock-market decline of 2008 was a result of baby boomer
Baby boomer
A baby boomer is a person who was born during the demographic Post-World War II baby boom and who grew up during the period between 1946 and 1964. The term "baby boomer" is sometimes used in a cultural context. Therefore, it is impossible to achieve broad consensus of a precise definition, even...
s aging past their peak spending years. This prediction was based on the observation that consumer
Consumer
Consumer is a broad label for any individuals or households that use goods generated within the economy. The concept of a consumer occurs in different contexts, so that the usage and significance of the term may vary.-Economics and marketing:...
spending peaks near age 50. In 2002 Dan Arnold echoed this theory in his book The Great Bust Ahead
The Great Bust Ahead
The Great Bust Ahead is a somewhat controversial book by Dan Arnold predicting an inevitable, massive economic depression in the United States and United Kingdom beginning in the years 2011-2012. It is available only on Amazon.com, where it remains a best-seller...
, with the big spenders being 45-54 year olds, and their numbers peaking in 2011-2012.
Other authors, such as Schieber and Shoven, suggest that the gradual peaking of the social security trust fund in the United States will occur around the 2007-2009 time period.
Some experts expect the worst consumer recession, since 1980, to occur when aging boomers start retiring, adding to rising unemployment, decline in house values
United States housing market correction
A United States housing market correction is a market correction or "bubble bursting" of a United States housing bubble; the most recent began following a national home price peak first identified in July 2006. Because realty trades in illiquid markets relative to financial assets such as common...
, and declining stock prices. However other experts have suggested that immigration to the US
Immigration to the United States
Immigration to the United States has been a major source of population growth and cultural change throughout much of the history of the United States. The economic, social, and political aspects of immigration have caused controversy regarding ethnicity, economic benefits, jobs for non-immigrants,...
and the rise of emerging economies will offset the baby boomer demographic impact. Still other experts have postulated, that due to the 2008 major stock market decline and home equity crash, that many baby boomers will have lost so much equity that they will retire at a later age than was previously planned.
It has been argued that during 2008-2032, US will experience the highest population growth, whereas in Japan the population will decline. Thus demographically US may represent better prospects for the stock market.