{"id":839783,"date":"2026-06-02T19:32:43","date_gmt":"2026-06-02T19:32:43","guid":{"rendered":"https:\/\/www.europesays.com\/us\/839783\/"},"modified":"2026-06-02T19:32:43","modified_gmt":"2026-06-02T19:32:43","slug":"economists-say-were-in-a-g-shaped-economy-what-does-that-mean-and-how-is-it-different-from-a-k-shaped-one","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/us\/839783\/","title":{"rendered":"Economists say we’re in a G-shaped economy. What does that mean, and how is it different from a K-shaped one?"},"content":{"rendered":"\n

Americans keep saying they\u2019re worried about money. And new data from The University of Michigan (1) underscores the idea that consumers are pessimistic about the economy. Households are still worried about grocery prices, the cost of gas and the labor market rather than showing broad confidence in the economy. Younger adults say homeownership feels out of reach<\/a> and that building wealth is harder than ever.<\/p>\n

Yet the economy keeps producing a seemingly contradictory result. People are still shopping, restaurants remain busy and airports are packed. Consumer spending continues to grow, albeit more slowly than before. The disconnect has become one of the most puzzling questions in economics.<\/p>\n

Must Read <\/p>\n

Some economists think they\u2019ve found an answer in what they refer to as a \u201cG-shaped economy (2)\u201d. That suggests that millions of younger Americans may be getting more help than the economic data can easily measure.<\/p>\n

It\u2019s worth noting that the framework doesn\u2019t claim that younger Americans are thriving. It actually starts from the opposite assumption. The question is whether older generations are quietly helping bridge the gap.<\/p>\n

What is a G-shaped economy? <\/p>\n

The term comes from market strategist Ed Yardeni (3), who argues that \u201cG\u201d stands for \u201cgenerational.\u201d<\/p>\n

The idea is simple: Baby boomers, Americans born between 1946 and 1964, accumulated enormous wealth over the past several decades through home appreciation, retirement accounts, pensions, businesses and investments. Boomers held $77 trillion in wealth as of 2022, according to a 2026 analysis by Pew Research (4).<\/p>\n

The \u201cG\u201d theory suggests that when younger households struggle, older generations increasingly step in, sustaining spending that might otherwise disappear.<\/p>\n

That support can take many forms. Parents helping with down payments. Grandparents covering college costs. Family members contributing to rent, childcare expenses, vacations, emergency bills or even everyday living costs<\/a>.<\/p>\n

\u201cIn our opinion, much of the affordability crisis in America today is affecting younger generations,\u201d Yardeni told USA Today, \u201cwhile the older generation of Baby Boomers is helping them cope with it.\u201d<\/p>\n

Read More: Taxes are going to change under Trump\u2019s \u2018big beautiful bill\u2019 \u2014 4 reasons you can\u2019t afford to waste time<\/a><\/strong><\/p>\n

How is it different from a K-shaped economy? <\/p>\n

For years, economists have described the post-pandemic economy as \u201cK-shaped\u201d. One group moves upward while another falls behind. Higher-income households continue to accumulate wealth while lower-income households struggle with inflation, debt and stagnant purchasing power.<\/p>\n

The G-shaped economy doesn\u2019t reject the K-shaped model but argues that family wealth may be shouldering some of the economic burden.<\/p>\n

A young family struggling to save for a home might receive a gift from one or both sets of parents. An adult child facing rising living costs may temporarily move back home. Grandparents may cover expenses that would otherwise force younger households to cut spending.<\/p>\n

That may help explain why consumer spending has remained surprisingly resilient even as sentiment surveys have deteriorated.<\/p>\n

What does this mean for your finances? <\/p>\n

The G-shaped framework may help explain today\u2019s economy, but it doesn\u2019t eliminate the underlying challenges. U.S. household debt reached $18.8 trillion in the first quarter of 2026, with most of that in mortgage debt. The New York Federal Reserve said the rates of what it called \u201cserious delinquency\u201d had stabilized for auto loans and credit cards, but increased for mortgages. Savings rates have also declined (5), as households face persistent pressure from housing costs and other essentials such as food and energy.<\/p>\n

That\u2019s why financial experts cautioned against viewing family support as a permanent solution.<\/p>\n

If you\u2019re receiving help from parents or grandparents, consider using it strategically. A down payment, debt payoff or emergency fund contribution can strengthen your long-term finances far more than additional lifestyle spending.<\/p>\n

If you\u2019re in a position to help younger family members, experts generally recommend doing so with clear expectations and a specific purpose. Assistance tied to housing, education or debt reduction often has a longer-lasting impact than simply subsidizing monthly spending.<\/p>\n

You May Also Like <\/p>\n

Join 250,000+ readers and get Moneywise\u2019s best stories and exclusive interviews first \u2014 clear insights curated and delivered weekly. Subscribe now.<\/a><\/strong><\/p>\n

Article Sources <\/p>\n

We rely only on vetted sources and credible third-party reporting. For details, see our ethics and guidelines<\/a>.<\/p>\n

Survey Research Center (1<\/a>); USA Today (2<\/a>); Yahoo Finance (3<\/a>); Pew Research Center (4<\/a>); Trading Economics (5<\/a>)<\/p>\n

This article originally appeared on Moneywise.com<\/a> under the title: Economists say we’re in a G-shaped economy. What does that mean, and how is it different from a K-shaped one?<\/a><\/p>\n

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.<\/p>\n","protected":false},"excerpt":{"rendered":"Americans keep saying they\u2019re worried about money. And new data from The University of Michigan (1) underscores the…\n","protected":false},"author":3,"featured_media":839784,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_share_on_mastodon":"0"},"categories":[12],"tags":[658,64,4051,79,8310,255081,114493,23845,9593,141717,67,132,68],"class_list":["post-839783","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-baby-boomers","tag-business","tag-consumer-spending","tag-economy","tag-ed-yardeni","tag-everyday-americans","tag-generations","tag-pew-research","tag-robert-kiyosaki","tag-the-university-of-michigan","tag-united-states","tag-unitedstates","tag-us"],"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@us\/116682185045620754","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/839783","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/comments?post=839783"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/839783\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media\/839784"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media?parent=839783"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/categories?post=839783"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/tags?post=839783"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}