Why the Taylor Swift Economy Isn’t Real

STORY: :: Balazs Koranyi, Chief Correspondent of the ECB

“There has been a lot of hype about the huge benefits that Taylor Swift’s concert tour would bring to Europe. But there’s just one problem: ‘Swiftonomics’ isn’t real.”

“I decided to do a case study in Stockholm. Stockholm is one of the places where Taylor Swift has already achieved success. The concerts took place in May. We already have some real numbers. And I thought Sweden would tell us if this advantage actually exists. And you know, there is an advantage. About 180,000 people attended her three concerts in Stockholm, and that brought in revenue of about 850 million Swedish kronor, which would be about 81 million dollars.”

“It sounds like a lot of money, but it’s actually not. Even for a relatively small city like Stockholm, it’s not a big advantage. It’s a good weekend for Stockholm. It’s a reasonably good weekend for Sweden.”

“We also looked at inflation. Sure, tickets were pretty expensive. Hotel prices went up. But if you look at the whole country and consider that Sweden is a small country, it has no impact at all. And of course there is also a dark side of the economic impact, which is that all of Swift Corporation’s profits are being repatriated to the US. In fact, there is even a small burden on Europe because the money made from these concerts is simply being taken out of here.”

“So I thought, let’s look at the bigger picture, because it’s not just about concerts, it’s also about the Olympics in Paris. We have Euro 2024, the European football championships, which are going on. Big mega-events that are supposed to bring enormous benefits to the people of Europe. I’ve spoken to a number of economists and the conclusions seem to be the same everywhere.”

:: Carsten Brzeski, economist at ING

“At the local level, a Taylor Swift concert or other major events can have a positive impact, but when you look at the wider economy, you have to look very closely to see a significant impact on economic activity and inflation.”

“To have a meaningful impact on the economy, new money would have to flow into the economy. In this case, it’s not new money. It’s about people choosing how to spend their money.”

“People who go to a Taylor Swift concert or go to the European Championships or the Olympics will not be able to spend the money later. So there may be a very short-lived, very short-term positive economic effect, but over a whole year it is hardly measurable.”