Economist Ed Yardeni: Pay Attention to Aging Population’s Economic Impact

For much of the last decade, the national conversation about the U.S. economy has revolved around inflation, interest rates, and inequality. But according to veteran economist Ed “Dr. Ed” Yardeni, one of the most powerful forces shaping the current and future economy is far less discussed: America’s aging population.

Yardeni -- noted national analyst on CNBC, Bloomberg Television, Fox Business, the Wall Street Journal and elsewhere -- is the President of Yardeni Research and regularly shares insights on global investment strategies.

He framed the current economic climate not as an era of decline but one of surprising resilience. “Back in 2020, when things looked pretty dismal, the pandemic started, and we had lockdowns,” Yardeni told American Farmland Owner.

Yardeni continued, “I said, you know, this could turn out to be the ‘Roaring 2020s,’ which seemed delusional at the time. But so far, so good. Real GDP (Gross Domestic Product) is at an all-time record high. The stock market’s a record high.”

Ed Yardeni bio:

• Yardeni Research, Inc. – President

• Oak Associates – Former Chief Investment Strategist

• Prudential Equity Group – Former Chief Investment Strategist

• Deutsche Bank – Former Chief Investment Strategist

• CJ Lawrence – Former Chief Economist

• Prudential-Bache Securities – Former Chief Economist

• EF Hutton – Former Chief Economist

• Federal Reserve Bank of New York – Former Economist

That optimism, Yardeni said, exists alongside real challenges. Many of those hurdles are demographic. The U.S. population is aging rapidly as baby boomers live longer, work longer, and retire with unprecedented levels of wealth. Those shifts have profound implications for everything from labor markets to land ownership.

RELATED: America’s farm population is among the sectors that is getting older. Many of those rural towns have been losing residents for years. And that makes it more difficult for older farmers to get health care and nursing home care close to home. 

Rethinking the ‘K Economy’

Much has been made of the so-called “K-shaped economy,” where higher-income households thrive while others struggle. Yardeni doesn’t reject the concept outright, but he believes it misses a critical factor.

“When I look at issues of income inequality, wealth inequality, relative prosperity, and all that,” he said, “what I find is, when I look at the studies of it, they almost never discuss the demography of aging.”

Older Americans, he explained, are naturally more affluent. “It turns out, obviously, that older people tend to be better off than younger people. It makes sense. They’ve worked longer, they’ve got more experience, they get paid more, and they also accumulate wealth along the way,” Yardeni said.

That accumulated wealth is staggering. Yardeni noted that baby boomers have “accumulated $80 trillion of net worth, and now they’re retiring with that kind of money and spending it.”

For farmland owners, this is especially relevant: much of that wealth is tied up in real assets like land, equipment, and businesses.

Wealth Transfer and Family Support

Rather than hoarding that wealth, Yardeni sees many retirees redistributing it within their own families. “What I see from my personal experience, and from my friends, is a lot of us are trying to help our young adult children,” he said.

“We have to admit that there actually is an affordability problem.” said Yardeni of the financial hardships for younger Americans, “It’s hard to afford a house, it’s hard to afford paying for childcare.”

This intergenerational support helps explain why consumer spending has remained strong despite higher costs. “If it was just going to be a handful of wealthy baby boomers keeping the economy going, that’s kind of a stretch,” Yardeni said. “There clearly is more going on in our economy than can just be described as a ‘K economy.’”

For agricultural families, this dynamic often shows up in succession planning, which can help the next generation buy into the operation, secure land leases, or weather volatile markets.

Labor Shortages and Productivity Pressure

The aging population is also reshaping the labor force. With fewer young workers entering the economy and more older workers retiring, labor shortages are becoming structural rather than cyclical.

“The longer-term impact is that if you’ve got a shortage of labor because of the demographic factor…and you want to maintain a decent standard of living…that can only be done with productivity,” Yardeni said.

He predicted this shift even before the pandemic. “Demographically, the baby boomers are retiring, and there’s going to be a slowdown in the growth of the labor force,” he explained.

Yardeni added, “Companies would have really no choice but to scramble to augment the productivity of the workers they have.”

That trend is already visible. “We’re seeing that companies are not laying off workers. They’re holding onto them, and they’re giving them more tools to become more productive. And therefore, they’re also paying them more,” Yardeni said.

In agriculture, this often means greater investment in technology like precision equipment, automation, and data-driven decision-making to do more with fewer people.

Japan’s Shrinking Population

Yardeni warned the Americans need to pay attention to what has been taking place in Japan. “If we don’t replace ourselves (by having more babies), which we’re not — fertility rate in America is below two — and the population starts to shrink,” he said, “Then all you have to do is look over at Japan today.”

Japan’s economy, he noted, shows what happens when aging outpaces growth. “It’s a rapidly aging population, very geriatric,” Yardeni said, “A lot of productivity there, but it’s hard to keep an economy going if the growth rate of the labor force isn’t keeping up with the standard of living that you’d like to have.”

As the nation ages, understanding demographic trends may be just as important as watching commodity prices or interest rates because demographics can shape the economy for decades.

Ed “Dr. Ed” Yardeni will be a featured speaker at the Land Investment Expo in Des Moines, Iowa, on January 13, 2026.

American Farmland Owner is a media sponsor of the Land Investment Expo.