Why a 2020s rerun of the Roaring Twenties remains wishful thinking
Optimism abounded as 2019 drew to a close. If the 2010s had been a lost decade of weak growth and stagnating living standards then the years to come were going to be much better.
The talk was of a new Roaring Twenties, a repeat of the decade that followed the first world war. There were even Great Gatsby-themed fancy dress parties to celebrate the good times to come.
All of that now looks wildly premature. So far, the 2020s have been anything but roaring. The pandemic that spread around the world in early 2020 is far from over and its impact continues to ripple through the global economy.
In China, where Covid-19 had its origins, the authorities have used draconian lockdowns in an attempt to eliminate the virus. As a result, the economy has pretty much ground to a halt (if last week’s official figures are to be believed) and actually contracted (if they are not).
News from the other two big engines of the global economy is no better. The annual inflation rate in the US is at a 40-year-high of 9.1%, prompting concern on Wall Street that the country’s central bank will adopt a more aggressive approach to interest rates.
If there are fears of recession in the world’s biggest economy, then those fears are even more pronounced in Europe, which has a war on its eastern flank, the prospect of energy shortages this winter and political upheaval in Italy with which to contend. It was not a major surprise to see the euro fall below parity against the US dollar for the first time in two decades last week.
Nor are the problems confined to the world’s leading economies. Sri Lanka – through a combination of the pandemic, the war in Ukraine and gross mismanagement – is a country on the brink of collapse and it would be brave to assume that
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