After the end of every era, a handful of images tend to linger in the mind. For me, the period of financial exuberance that came to a messy end in 2008 will always be encapsulated by the jobs fair I went to in my final year of university in 2006. I remember strolling from one recruiter’s stand to the next to gather up their extravagant freebies. I got a very nice shower radio from Goldman Sachs. Another company (I forget which) was handing out popcorn machines. There was no real question we would get good jobs; the question was which we would choose.
Of course it didn’t last. The decade that followed the financial crisis was grim by a number of metrics, notably in terms of people’s pay packets. Wage growth across OECD countries was unusually weak. In the UK, real wages grew an average 33 per cent a decade from 1970 to 2007 but didn’t grow at all in the 2010s.
Now we are watching another era come to an end. Not, sadly, the era of tough economic times, but the era in which those problems were accompanied by very low interest rates. Central banks around the world are raising rates to combat inflation. So what will we remember of the age of cheap money?