{"id":12488,"date":"2021-06-21T01:01:00","date_gmt":"2021-06-21T00:01:00","guid":{"rendered":"https:\/\/www.economicsobservatory.com\/?post_type=question&p=12488"},"modified":"2021-06-18T15:34:26","modified_gmt":"2021-06-18T14:34:26","slug":"are-we-about-to-experience-another-roaring-twenties","status":"publish","type":"question","link":"https:\/\/www.economicsobservatory.com\/test\/are-we-about-to-experience-another-roaring-twenties","title":{"rendered":"Are we about to experience another Roaring Twenties?"},"content":{"rendered":"\n

In early January this year, Martin Sandbu of the Financial Times<\/em><\/a> asked whether the \u2018Roaring Twenties\u2019 that followed the end of the Spanish flu pandemic in 1920 might be repeated a century later.<\/p>\n\n\n\n

The possible parallels extend beyond the cessation of the pandemic. The 1920s ushered in a revolutionary \u2018general purpose technology\u2019 \u2013 electrification \u2013 which transformed business and productivity. Artificial intelligence (AI) in the 2020s has the potential to do the same.<\/p>\n\n\n\n

In the United States, there was radical political agitation that reached its zenith in 1919-20 in what became known as the First Red Scare. Similarly, 2020 was marked by political agitation in the form of the Black Lives Matter protests across America and around the world.<\/p>\n\n\n\n

Is history going to repeat itself? Will the 2020s be roaring?<\/p>\n\n\n\n

Did the economy roar in the 1920s?<\/h3>\n\n\n\n

The Roaring Twenties refer to the artistic, cultural, social and technological innovations that originated in the United States in the 1920s. Our modern consumer culture emerged during that age of speakeasies, jazz, flappers, the Charleston and radio. Women in democracies around the world were given the right to vote (de Bromhead, 2018<\/a>). It was also an era of opulence and hedonism, as portrayed in F. Scott Fitzgerald\u2019s novel, The Great Gatsby<\/em>.<\/p>\n\n\n\n

But how did the economy perform in the 1920s?<\/p>\n\n\n\n

Figure 1 shows the growth in real GDP per capita across seven major economies following the end of the First World War and up to 1935. After a substantial post-war recession, the United States, the UK and Canada began to grow again from 1921 onwards. The growth in real GDP in France outstrips other nations \u2013 it truly had a Roaring Twenties. Notably, the 1923 hyperinflation in Germany did not put a major dampener on its growth in the 1920s. Growth in Japan and Italy was more akin to that of the United States.<\/p>\n\n\n\n

Figure 1: Real GDP per capita (2011 US dollars), 1918-1935<\/h4>\n\n\n
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