Economic Factor #5: Demographics

  • March 29, 2017

    I think that the Baby Boom generation demonstrated the power of demographics to alter the path of an economy. As that population bubble worked its way through time, its effects can be measured. Schools boomed in the 50s, higher education boomed in the 60s and I believe that part of the economic boom of the 80s and 90s can be attributed to the huge increase in the demand of baby boomers for housing, automobiles and other goods.

    Economists rarely discuss this, but I believe that immigration has been a huge economic driver for the U.S. economy – most clearly in the demand for housing. Growth begets growth. Massive population increases from immigration create demand for housing and other goods. Increased demand for housing and other goods create jobs and profits that inevitably lead to more consumer demand and more growth. Gold rushes throughout U.S. history reveal the incredible surges in wealth and income that accompany a major influx of ambitious people.

    Rates of immigration into the US over the last two centuries have generally coincided with current and subsequent economic growth. In the last two to three decades, legal immigration has averaged a little over 1 million people per year. Imagine the stimulating effect of all those immigrants on the demand for housing and the goods and services offered by local businesses. It is quite noteworthy that illegal immigration peaked in March of 2007, about four months prior to the first financial market warning signs of the housing market crash that led to the huge financial crisis of 2008.

    We can observe how growth begets growth when people pour into areas of hot economic activity. But immigration can also damage an economy when the economy does not have the institutions to encourage those immigrants to join in wealth-creating endeavors.

    Importance of factor in general: B+

    Prospective influence of this factor on the U.S. economy: B

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>



1256 contracts, 2010, 401K, adp report, Advisors, Alexandra Twin, alternative investments, annuity, asset allocation, asset classes, asset management, Associated Press, away, banks, Barrons Top 100, BCA, BCA. Biltmore Capital, Ben Bernanke, Best Week, bias, Biltmore, Biltmore Capital, Biltmore Capital Advisors, bond market, Brand, Brand Recognition, Business, Call, CFP Princeton, changes in market price, Chief Investment Officer, closed end funds, CNBC, CNBC Halftime Report, CNN, CNN Money, CNNMoney,, collar stock, college grads, Consumer Confidence Report, correlations, Covered, Covered Call Options, credit ratings, customized investment strategies, Dean, donald chambers, Dow Jones, dr don chambers, drop, Early, easy trading, economic policy, economy, Edge, efficiency, election, end, equilibrium, equity trading, etf, etf trading, ETFs, euro, Europe, Europe debt, European debt crisis, family office approach, federal income tax, federal investment income tax, Financial, financial advisor, financial crises, financial distress, financial management, financial security, financial strategies, Ford, Fox, Fox Business, fund manager, futures contracts, Gains, General Motors, Global, global market, Global stocks, groupon, halftime report, Herbert Lash, high income tax, home country, Home Sales, housing market, IDEAS, income tax, income taxes, initial public offering, Instant View, investment bias, investment income, investment returns, investment risk, investment strategies, Investors, IPOs, IRA, Jilian Mincer, Jonathan Cheng, KANA INAGAKI, key, large losses, long risk exposure, Los Angeles Times, make money, making investment money, making money last, Manufacture, Manufacturing, Market, market news, market price, market volatility, Markets, marketwatch, MICHELE MAATOUK, Mike Miliard, Molly Vernon, money, Money Manager, money managers, money strategy, municipal bond interest, municipal bonds, nassau club, New Jersey Advisors, New York Times, NJ, NJ advisors, NJ financial advisors, NJ money manager, NJ wealth advisor, NJ Wealth Advisors, obamacare, oil slide, Options, options strategies, Outlook, outperformance, Pending, personal financial services, personal risk analysis, Play, portfolio manager, Potfolio Manager, Princeton, Princeton Advisors, Princeton asset management, princeton financial advisors, Princeton Money Managers, Princeton wealth advisor, private wealth management, rally, recession, Recognition, registered investment advisor, Registered Investment Advisory Firm, retirement, retirement strategy, return, returns, Reuters, reward, RIA, RIA Princeton, Risk, risk exposure, riskier, rmd, Roth IRA, safer, saving taxes, savings, SEC-registered, Seeking Alpha, short risk exposure, Shudder, signals, skype, social security, social security benefits rules, star ledger, state income tax, Stephen Bernard, Stock, stock market, stock market returns, stock market winners, stock option strategies, stock price, stock prices, stock research, stock strategy, Stock Volatility, Stocks, structured notes, Stuart Day School, swine flu, tail risk, Tax Advantaged Investments, tax free investments, tax savings, tax strategy, taxes, taxes for social security, taxes on investment income, The Dean, The Wall Street Journal, Thomson, Thomson Reuters, Tick, Tim Ralph, Timothy Ralph, Today, Tony Roth, Trading, tricks, Tyler, tyler vernon, U.S., U.S. dollar gains, U.S. Stock, unemployment, USA, USA Today, VIX, volatility, Wall Street, wealth management, wealth manager, wells fargo, world market, worth, Yahoo, Yahoo Financial,