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Global Head of Research
Since the beginning of the coronavirus pandemic, all eyes have been on the unfolding health catastrophe and the consequences of confinement: economies halted, exploding rates of unemployment (in particular in the United States), and rising debt levels. In this extraordinary context, inflation is often overlooked.
Without a doubt, the Covid-19 pandemic is shaking the financial industry like never before. But this is not the first time the world has faced a pandemic of this scale, nor is it the first time that public policymakers, business leaders and pundits have asked: “Is it different this time around? Are we at a turning point?”. In this new series of papers entitled “The Day After”, we share with our clients our thinking on what the long-term implications of the current, unprecedented crisis on the investment landscape could be.To start “The Day After” series, in this first paper – Covid-19: the invisible hand pointing investors down the road to the ‘70s – we distill the key conclusions of a new work. We highlights the key reasons the current crisis could be the trigger for a regime shift that could, in the long run, lead to a new equilibrium with features similar to those seen in the ‘70s. The road back to the ‘70s will take time to travel and will not be straight. In the journey along this road, investors will need to stay active and rethink their investment approaches around some key principles, which combined represent the new toolbox for the 2020s.
Group Chief Investment Officer