There are significant effects of changing demographics on economic indicators:  growth in GDP especially, but also the current account balance and gross capital formation.  The 15-24 age group appears to be key in these effects, with increases in that age group exerting strong positive effects on GDP growth, and negative effects on the CAB and GCF.  This group's expenditures do not appear significant in suveys such as the Consumer Expenditure Survey (CES), conducted by the Bureau of Labor Statistics in the U.S., but shelter costs are represented there only in terms of interest or rental payments, not total expenditure. (Expenditures on house purchase appear as changes in total assets and liabilities.) Thus the actual total expenditure generated in the economy by the age group in providing new housing units – whether rental or owned – is not represented as expenditure in the CES. This effect is magnified by the fact that a good deal of expenditure on cars, housing, and furnishings for the group is often made by parents, and reported as expenditure by the parental age group rather  than by the target age group.  The only way to see the total impact of this or any age group is to analyze econometrically the relationship between the growth in various age group shares, and growth in GNP or GDP.  This type of analysis indicates that the 15-24 age group is the most significant in affecting economic growth.

There have been major shifts in the share of the population aged 15-24 during the past half century or more, many of which correspond closely to periods of institutional turmoil.  The hypothesis presented in this paper is that increases in the share of the 15-24 age group lead producers to ratchet up their production expectations and take out loans to expand production capacity; but then reductions in that share – or even declining rates of increase – confound  these expectations and precipitate a downward spiral of missed loan payments and even defaults and bankruptcies, putting pressure on central banks and causing foreign investors to withdraw funds and speculators to unload the local currency.  This appears to have been the pattern not only during the 1996-98 crisis with the Asian Tigers, but also during the “Tequila” crisis of the early 1990s, the crises that occurred in the early 1980s among developed as well as developing nations, and the economic problems Japan has experienced since about 1990.  The effect appears to be even more pronounced for the current 2008-2009 period.