These 20s (the 2020s) could be another Roaring 20s (as in the 1920s), according to Ed Yardeni, founder of Yardeni Research Inc. “History doesn’t repeat itself, but it does rhyme,” Yardeni says (à la Mark Twain) on this week’s episode of Merryn Talks Money. Making parallels between the Spanish flu pandemic that preceded the 1920s and the aftermath of the Covid-19 crisis, Yardeni contends “we’re in the early stages of a productivity growth boom.”
Joining host Merryn Somerset Webb, Yardeni explains that wages could grow even faster because of rapid productivity growth, which is reason to be long-term bullish on stock markets—even if there turns out to be a speculative tech bubble that bursts. That doesn’t change “the course of progress that would be made fundamentally in a roaring 2020s scenario,” he says.
They also discuss what he considers the arbitrary nature of central banks’ 2% inflation target. “It’s kind of nonsense,” Yardeni says. “It gives them something to do, to implement policies to achieve that target, to sell their importance. But I think central banks have become way too important in our business lives, because they are so meddlesome.”