The Julia La Roche Show #219 Campbell Harvey: End of Boom-Bust Cycle? | Will Yield Curve Show First False Signal?
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Dec 12, 2024 Professor Campbell Harvey, a finance expert from Duke University and creator of the inverted yield curve, sheds light on the current economic landscape. He discusses the surprising resilience of the economy in 2023 and the potential end of the boom-bust cycle. The conversation dives into how technological innovations and the impact of wealthy consumers shape growth prospects. Harvey also critiques the Federal Reserve's policies and explores the implications of the inverted yield curve, offering insights into the future of U.S. economic stability.
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End of Boom and Bust?
- BlackRock posits the end of boom-bust cycles, citing robust 2023 growth despite recessionary signals.
- Professor Harvey finds this premature, recalling similar claims after 2001, disproven by the 2008 crisis.
Moderating Factors
- Two factors moderate GDP fluctuations: wealthy consumers and technological innovation.
- Richer individuals, less sensitive to economic downturns, stabilize consumption.
Technological Innovation
- US technological leadership, driven by decentralized tech and AI, may redefine recessions.
- These innovations could boost productivity, leading to slower growth as the "new recession."
