Baby Boomer Age Wave Theory

AAA

DEFINITION of 'Baby Boomer Age Wave Theory '

An economic theory popularized by economist and writer Harry Dent, who concludes that the U.S. and other European markets will peak between 2008 and 2012. This is based on Dent's finding that a human's consumer spending habits peak by age 50; therefore, as the baby boomer generation reaches this age, the economy may be approaching a peak in consumer spending and in the markets.

INVESTOPEDIA EXPLAINS 'Baby Boomer Age Wave Theory '

Because American soldiers returned from WWII earlier than European soldiers, the theory concludes that markets in the U.S. will peak around 2008, while European markets will peak around 2012.

Assuming that the theory's predictions are accurate, some expect this to have wide-ranging implications. In addition, when baby boomers retire, this could cause spikes in unemployment and decreases in the housing market as aging baby boomers spend less. Others believe that the influx of immigration will help stave off these effects in the United States.

RELATED TERMS
  1. One-Child Policy

    A policy implemented by the Chinese government as a method of ...
  2. Boomernomics

    An investing strategy that involves buying equities directly ...
  3. Demographics

    Studies of a population based on factors such as age, race, sex, ...
  4. Baby Boomer

    A person who was born between 1946 and 1964. The baby boomer ...
  5. Unemployment Rate

    The percentage of the total labor force that is unemployed but ...
  6. Nordic Model

    The social welfare and economic systems adopted by Nordic countries.
Related Articles
  1. Retirement

    How Baby Boomers Will Change The Way Others Retire

    Generation X and Generation Y still have many lessons to learn from their elders, including how to make the most of retirement in the 21st century. Find out what retirement trends baby boomers ...
  2. Options & Futures

    Retirement Savings Tips For 35- To 44-Year-Olds

    Learn how the "sandwich generation" can save for retirement while taking care of their kids and parents.
  3. Budgeting

    Healthy Survival Guide For Sandwiched Boomers

    Caring for children and parents is squeezing baby boomers' finances. Find out how to cope.
  4. Retirement

    Boomers: Twisting The Retirement Mindset

    This generation must take a whole new approach to post-work planning.
  5. Economics

    10 Countries With The Biggest Forex Reserves

    Without adequate reserves, a nation's economy can grind to a halt. Here are the 10 nations with the biggest forex reserves.
  6. Home & Auto

    Tips For Maximizing The Value Of A Kitchen Touchup

    At a fraction of the cost of a remodel, a homeowner can make strategic updates to his or her kitchen that could transform this part of the home.
  7. Economics

    What Is The Labor Market Conundrum?

    We are facing a conundrum with investment implications: Why are wages still stagnant, when jobs are being created at the fastest pace since the late 90's?
  8. Economics

    Understanding Impairment

    In finance and accounting, impairment refers to the loss of value of a company’s capital stock.
  9. Economics

    What is a Promissory Note?

    A written promise by one party to pay another party a definite sum of money either on demand or at a specified future date.
  10. Savings

    How Microeconomics Affects Everyday Life

    Microeconomics is the study of how individuals and businesses make decisions to maximize satisfaction. Microeconomic principles can describe many everyday experiences. We use renting a New York ...

You May Also Like

Hot Definitions
  1. Asset Class

    A group of securities that exhibit similar characteristics, behave similarly in the marketplace, and are subject to the same ...
  2. Fiat Money

    Currency that a government has declared to be legal tender, but is not backed by a physical commodity. The value of fiat ...
  3. Interest Rate Risk

    The risk that an investment's value will change due to a change in the absolute level of interest rates, in the spread between ...
  4. Income Effect

    In the context of economic theory, the income effect is the change in an individual's or economy's income and how that change ...
  5. Price-To-Sales Ratio - PSR

    A valuation ratio that compares a company’s stock price to its revenues. The price-to-sales ratio is an indicator of the ...
  6. Hurdle Rate

    The minimum rate of return on a project or investment required by a manager or investor. In order to compensate for risk, ...
Trading Center