Consumer spending has proved remarkably resilient through several years of economic shocks, a puzzle many economists have explained by pointing to the wealthiest households as the main engine of growth. Soaring stock markets have produced a wealth effect that fuels consumption, while Americans without substantial investment portfolios have pulled back under elevated inflation and a stagnant job market.

But according to Wall Street veteran Ed Yardeni, the popular framing of a class-divided "K-shaped economy" obscures a division that runs along generational lines instead—one he has dubbed the "G-shaped economy." In a note earlier this month, Yardeni argued that baby boomers, the roughly 70-million-strong generation born between 1946 and 1964, are the true driving force behind consumer spending, which represents roughly 70% of U.S. GDP, and laid out how thoroughly that generation dominates the economy. The pattern is not unique to the United States: across advanced economies, households over 55 hold a disproportionate share of national wealth, a function of decades of asset accumulation, homeownership, and retirement saving.

Buoyed by an extraordinary stretch of financial and economic gains, boomers now hold a net worth of nearly $90 trillion, or about 52% of all U.S. household wealth, according to Federal Reserve household wealth data cited by Yardeni. That figure will soon be swelled by the Silent Generation, which is expected to pass much of its $20 trillion on to its boomer children.

"The concentration of wealth among older generations suggests that consumer spending is increasingly being supported by the spending of accumulated retirement wealth rather than labor income," Yardeni explained.

Boomers control about 54% of household stocks and mutual funds—worth close to $30 trillion—and own 41% of all household real estate, more than any other generation. That, Yardeni said, is why boomers can continue spending briskly despite high interest rates and inflation. In fact, higher rates work in their favor even as elevated borrowing costs squeeze younger Americans.

Boomers hold around $3.1 trillion in money market funds, roughly 60% of the household total, allowing them to earn more interest income as rates climb, according to Yardeni. The Silent Generation holds another 16%. By contrast, many younger Americans have yet to invest at all, and those who have tend to hold stocks that are more sensitive to higher rates.

High mortgage rates are also pricing millennials and Gen Z out of the housing market, particularly as they start families and need larger homes. Many boomers, meanwhile, either locked in ultra-low mortgage rates years ago or own their homes outright. Reluctant to surrender those low rates, older homeowners are staying put rather than downsizing—which limits the supply of homes for sale and pushes prices higher, further adding to boomer wealth. The phenomenon, often called the "lock-in effect," has kept inventory near historically low levels and intensified affordability pressures on first-time buyers.

"This dynamic helps explain why higher interest rates have done less to restrain consumer spending than many economists anticipated," Yardeni added. "For a large segment of the population, rates are not simply a cost of borrowing. They are also a source of income and the reason that home prices are rising!"

Parents are still helping their millennial and Gen Z kids

The AI boom is another major driver of economic growth, with a handful of hyperscalers on pace to spend more than $1 trillion next year. That flood of money is also lifting stocks in tech, infrastructure, energy, and construction, delivering gains across generations. Boomers, largely insulated from a labor market that AI could disrupt, are well positioned: because they are already retired or approaching retirement, their spending does not depend on wage growth, hiring conditions, or job security, Yardeni noted. For younger workers, the stakes run in the opposite direction, since their future earnings potential is tied to a labor market that may be reshaped by automation.

Sitting atop the economy, however, does not mean boomers are cut off from younger generations. They are indirectly affected, for instance, when their adult children struggle to find jobs or to earn enough to support themselves. Boomers are also sharing some of their wealth with their children now rather than waiting to pass it on after death.

A report last month from Visa Business and Economic Insights found that a quarter of millennial homeowners received help from their parents on a down payment and would not have been able to buy their current home without it.

"Rather than waiting to pass down inheritances later, many boomers are using their wealth to help their children clear major financial hurdles now, when the support will have the greatest impact," Visa said (report).

Still, younger generations should not expect a windfall from inheritances. The same report estimated that boomers will pass on just $36 trillion of their $93 trillion in wealth. That figure excludes wealth held by the top 1% of households, subtracts debts and other liabilities, and deducts retirement spending, charitable donations, taxes, and fees.

Despite being the wealthiest generation, boomers still carry significant debt, including mortgages, credit cards, and auto loans; borrowing against brokerage accounts and other investments; and personal and business loans.

"Taken together, the high share of cost-burdened older homeowners and substantial non-mortgage debt indicate that many baby boomers have far less financial flexibility—and potentially less wealth to pass on—than headline figures might suggest," Visa said.

How the transfer of that wealth ultimately unfolds—and whether younger generations' earning power improves as the labor market and housing conditions evolve—will go a long way toward determining whether consumer spending stays on its current footing in the years ahead.

This story was originally featured on Fortune.com.