Taylor Swift‘s global tour might just hold the key to boosting economies struggling with the global economic slowdown. As the World Bank warns of a possible recession in its 2022 report, many nations are bracing for economic challenges.
The global economy is projected to slow down for the third consecutive year in 2024, raising concerns about an impending recession. The effects of a global recession, such as disrupted supply chains, increased unemployment, rising prices, and business defaults, can vary across different countries.
Taylor Swift’s ongoing Eras tour, which started in March 2023 and is set to end in December 2024, has already made history as the highest-grossing music tour ever, surpassing $1 billion in ticket sales globally. This doesn’t even include additional revenue from the Eras Tour film and merchandise sales during the tour.
how does a music tour tie into economic recovery?
The multiplier effect, a concept familiar to first-year economics students, explains how changes in economic activity can have ripple effects across various sectors, ultimately boosting a country’s total output. Swift’s tour, like those of other major artists, can trigger this multiplier effect, benefiting economies.
Take, for instance, Swift’s concerts in Singapore in March 2024. Despite controversies surrounding an exclusive deal for Southeast Asia, Singapore saw a significant economic boost from hosting six concerts. These concerts led to a surge in tourism-related bookings, inbound flights, and accommodation bookings, contributing to Singapore’s GDP growth.
Economists estimate that Swift’s concerts in Singapore added around SG$300–$400 million to the country’s first-quarter GDP, on top of its year-on-year growth. This success mirrors the impact of the tour in the US, where the economy may have seen a multiplier boost of US$5 billion from concert-related spending.
Singapore’s strategic move to secure exclusive concerts showcases a creative approach to fiscal policy, reminiscent of Keynesian principles of government intervention during economic downturns. While traditional fiscal policies may face time lags, targeted spending policies involving entertainment industry giants can create immediate multiplier effects, aiding economies in recovery. This serves as a valuable lesson for nations worldwide facing economic challenges.