What is the 'gen-shaped' economy described by Ed Yardeni?

The 'gen-shaped' economy theory suggests that consumer spending is primarily driven by demographic age groups, particularly baby boomers, rather than a broad economic model.

How are baby boomers impacting the economy?

Baby boomers are the highest spenders due to their significant accumulated wealth and assets, helping to maintain consumer spending despite broader economic pressures.

When will the 'Great Wealth Transfer' benefit younger generations?

The substantial inheritance from baby boomers to younger generations is expected to continue unfolding over several decades, with estimates suggesting it will last until 2048.

Home / Business and Economy / Beyond K-Shape: Age Divides Today's Economy

Beyond K-Shape: Age Divides Today's Economy

13 Jan

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Summary

Boomers hold vast wealth, driving consumer spending significantly.
Younger generations face financial struggles due to debt and job market.
The 'Great Wealth Transfer' to younger heirs is ongoing until 2048.

Beyond K-Shape: Age Divides Today's Economy

The current economic landscape, characterized by diverging impacts on different demographics, is being re-evaluated. While the 'K-shaped' economy previously described a split between the wealthy and struggling populations, a new perspective highlights age as a more defining factor in consumer spending patterns.

Baby boomers, the wealthiest generation in history, are significantly contributing to economic resilience through their substantial assets and savings. In contrast, younger demographics like Gen Z and millennials face financial headwinds from student loan debt and a challenging entry-level job market, impacting their spending capacity.

Future economic shifts may include the 'Great Wealth Transfer,' estimated at $124 trillion, flowing from boomers to younger generations by 2048. This long-term inheritance is expected to eventually bolster the financial standing of heirs, though immediate challenges persist for many.