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In the
economics Economics () is the social science that studies the production, distribution, and consumption of goods and services. Economics focuses on the behaviour and interactions of economic agents and how economies work. Microeconomics analyzes ...
of
demography Demography () is the statistical study of populations, especially human beings. Demographic analysis examines and measures the dimensions and dynamics of populations; it can cover whole societies or groups defined by criteria such as edu ...
, 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.


Example

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 Baby boomers, often shortened to boomers, are the Western demographic cohort following the Silent Generation and preceding Generation X. The generation is often defined as people born from 1946 to 1964, during the mid-20th century baby boom. Th ...
''spending wave'' theory. According to Dent, the stock-market decline of 2008 was a result of
baby boomer Baby boomers, often shortened to boomers, are the Western demographic cohort following the Silent Generation and preceding Generation X. The generation is often defined as people born from 1946 to 1964, during the mid-20th century baby boom. ...
s aging past their peak spending years. This prediction was based on the observation that
consumer spending Consumer spending is the total money spent on final goods and services by individuals and households. There are two components of consumer spending: induced consumption (which is affected by the level of income) and autonomous consumption (which ...
peaks near age 50. In 2002 Dan Arnold echoed this theory in his book ''The Great Bust Ahead,'' with the big spenders being 45- to 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 expertshttps://www.reuters.com/article/ousivMolt/idUSN3131412220080131 Economy faces bigger bust without Boomers, Reuters, 31 January 2008 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, many baby boomers will have lost so much equity that they will retire at a later age than was previously planned.


See also

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Kondratiev wave In economics, Kondratiev waves (also called supercycles, great surges, long waves, K-waves or the long economic cycle) are hypothesized cycle-like phenomena in the modern world economy. The phenomenon is closely connected with the technology li ...
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Recession In economics, a recession is a business cycle contraction when there is a general decline in economic activity. Recessions generally occur when there is a widespread drop in spending (an adverse demand shock). This may be triggered by various ...


References

Recessions Market trends Business cycle Ageing Demographic economics {{macroeconomics-stub