Business People and Community

Forecast predicts another Roaring ’20s

Some experts believe that pent-up demand will push the economy into a rebound after the majority of the U.S. population receives the COVID-19 vaccine.
Flappers dance the Charleston

Flappers, speakeasies, the Ford Model T and a culture of wild abandon. These are some of the things we associate with the Roaring ’20s.

"This dynamic cultural period was shaped by an urban consumer lifestyle that was just coming into being,” said Max Fraser, assistant professor of history at the University of Miami College of Arts and Sciences. “It was marked by a bursting energy in American cities as people moved from rural to urban settings."

The ’20s, also called the Jazz Age, came after the end of the devastating World War I and the Spanish flu, which killed close to 50 million people worldwide. Historians credit the exuberance in music, fashion, consumer spending, and social decadence to the end of the war and increase in production of goods, which led to a period of unprecedented economic growth and prosperity. 

Last month, a group of U.C.L.A. economists predicted that our society would also enjoy a new “roaring ’20s” once the COVID-19 pandemic is over. In their report they predicted “a gloomy COVID winter and an exuberant vaccine spring,” followed by an eventual surge in the economy.

Even though some naysayers believe the economy will not bounce back right away after the pandemic, others believe that it will return strongly.

Alex Horenstein, assistant professor of economics at the Miami Herbert Business School, believes that the G.D.P will begin to rise—as soon as during the summer—after more people get the vaccine and feel safe.

“What we have now is not an economic crisis but a biological crisis, and we have solved it,” he said. “We have the vaccine.”

He sees all sectors of the economy that have been depressed coming back—including tourism, restaurants, and entertainment. Recovery in these areas will lower unemployment and generate growth, according to Horenstein. Moreover, the COVID-19 pandemic has accelerated technological changes that will benefit the whole economy, he pointed out.

Working remotely from home will likely lead to increased productivity. The mRNA technology that allowed the COVID-19 vaccine to be available so quickly will in the future be used to cure other illnesses, noted Horenstein.

“Right now, we are experiencing the artificial intelligence revolution and this revolution will accelerate the pace of technological change to levels that we have not seen before,” he indicated. “The change that is coming will dwarf the 1920s.”

Until the 20th century the biggest technological changes allowed humans to delegate physical labor first to animals (agricultural revolution) and later to machines (industrial revolution), he said.

“Now, for the first time in human history, we are going to delegate cognitive labor to machines. The artificial intelligence revolution, as well as the creation of sophisticated robots, will have a dramatic impact on almost every human activity,” Horenstein explained.

In the ’20s the freedom of having left WWI and the Spanish flu pandemic behind led to a period of unabashed gaiety as characterized in novels like “The Great Gatsby” by F. Scott Fitzgerald. Jazz Age parties became the rage where women, who were called flappers, dressed in short dresses, wore short hair, and engaged in wild behavior not seen or socially permitted in previous decades.

Hundreds of people circumvented the tight prohibition laws that forbade the use of alcohol and frequented speakeasies, underground illegal establishments that served alcoholic beverages.

After the COVID-19 pandemic, our society may experience a similar burst of energy. The pandemic imposed social distancing and social isolation for many during many months. Once it is over, what will happen? 

Debra Lieberman, associate professor of psychology in the College of Arts and Sciences, said people will be eager to regain a sense of their previous life. They will want to return to their gyms, their work, and be able travel, she concluded.  

“I think people will get out and celebrate,” she declared. “There will be lots of parties and lots of sex and people eating and celebrating.”