Jeremy J. Siegel, the renowned professor from the University of Pennsylvania’s Wharton School, dismisses the widespread notion that the economy will continue to grow at an anemic rate.
In an editorial in The Wall Street Journal, Siegel rejects the idea that economic growth will ratchet downward to a “new normal of an extended period of slow growth caused by households unwinding the large debts they incurred during the past boom.”
While this sort of Keynesian economics might make sense in the short run, Siegel says, consumer demand, breakthrough technologies, advanced medicine and alternative energies will handily prop up the economy. “Today, the outlook for technological growth is brighter than ever,” he wrote. “For the first time in history, thousands of scientists and researchers from China, India and other emerging markets are working together toward scientific breakthroughs.”
International growth, particularly among a growing middle class in India and China, will also fuel GDP growth in the U.S., which will supply them with the quality goods they seek, he maintains, concluding that a return to the historical average stock market return of 10% a year before inflation is not out of the question.
“As we emerge from the financial crisis,” he writes, “there is absolutely no reason to be pessimistic about either the U.S. or the world economy.”