Hemline Theory of Economics

George Taylor, an economist in the United States, made up the phrase "hemline theory" in the 1920s. The phrase is derived from the idea that hemlines on skirts are shorter or longer depending on the economy.

Theory

The hemline theory states that when the economy is strong, hemlines are short, and when the economy is tanking, hemlines are long.

Explanation

Taylor believed that when the economy was strong, women wore their skirts shorter because they were able to display their silk stockings. On the flip side, when the economy was bad, they could not afford decent stockings, so they would hide their legs behind longer skirts.

Skepticism

According to Barron's Handbook, a popular financial reference guide, the hemline theory -- "despite its sometimes uncanny way of being prophetic ... has remained more in the area of wishful thinking than serious market analysis."

History

Hemlines fell during the Great Depression, and during periods of economic strength such as the 1920s, 1960s and 1980s, hemlines got shorter.

Recession

During the recession of 2008-2009, the hemline theory did not hold up because skirts and shorts flourished, and the economy was in the tank.

References

• Barron's Handbook
• The Age