The Roaring Twenties after Covid-19: revisiting the evidence for Europe

Authors

Alessio Terzi, DG ECFIN, European CommissionFollow

JEL Code

N12, N14, N74, O14, O57

Abstract

Inspired by conspicuous historical parallels, some scholars and journalists have recently postulated that GDP growth and productivity might boom in the aftermath of the Covid-19 pandemic. This paper reviews the evidence for and against the ‘Roaring 20s’ hypothesis, concluding that some countries might experience a forceful economic expansion, possibly fuelled by pent-up demand, compounding a successful digital and green transition, or leveraging an export-led model. However, a strong prolonged economic bonanza is unlikely to materialise evenly across the EU. An uneven recovery would acquiesce imbalances within the Union, and especially the euro area. As such, policymakers should avoid complacency, and make the most of the Recovery and Resilience Facility funds, combining them with wide-reaching structural reforms, to improve economic prospects for the decade to come.

Recommended Citation

Terzi, Alessio (2021) "The Roaring Twenties after Covid-19: revisiting the evidence for Europe," Journal of New Finance: Vol. 2: No. 1, Article 3.
DOI: 10.46671/2521-2486.1013
Available at: https://jnf.ufm.edu/journal/vol2/iss1/3

Submission Date

3-31-2021

Approval Date

4-24-2021

Publication Date

5-6-2021