An unintended consequence of the virus has been ‘one of the wildest bull markets in recent economic history’ but a worsening of income distribution will have a negative impact further down the line.
Covid-19 will be remembered as the worst global economic shock in recent history but, compared to the most similar one, the Great Depression of 1929, its consequences on asset prices have been radically different.
In fact, the Great Depression started with an implosion of equity prices while the current pandemic started with a sharp correction in asset prices, especially as Covid reached Europe and the US in March last year, but quickly developed into one of the wildest bull markets in recent economic history.
The reason for the diametrically different equity performance mainly lies on a very