The Zhitong Finance App learned that Peter Oppenheimer, head of European macro research at Goldman Sachs, said that the global economy is entering a new supercycle, and artificial intelligence and decarbonization are two key factors that may have a positive impact in this new cycle.

According to reports, the supercycle is generally defined as long-term economic expansion, usually accompanied by GDP growth, and strong demand for commodities leads to price increases and high employment rates. Peter Oppenheimer said that the most recent major supercycle experienced by the global economy began in the early 80s of the last century. He explained that this period was characterized by a peak in interest rates and inflation, followed by decades of capital expenditure, falling inflation and interest rates, and economic policies such as deregulation and privatization. At the same time, geopolitical risks were mitigated and globalization was increasing.

However, Peter Oppenheimer added that not all of these factors will continue as they did in the past. He said, “We are unlikely to see a sharp drop in interest rates over the next ten years or so. We are seeing some resistance to globalization. Of course, we are also seeing an increase in geopolitical tension.”

Peter Oppenheimer said that although current economic development should theoretically lead to a slowdown in financial returns, it is also likely to have a positive impact, namely artificial intelligence and decarbonization. He said artificial intelligence is still in its early stages, but could have a “positive impact” on the stock market as it is increasingly used as a foundation for new products and services. He added: “We haven't seen it yet, but what we are relatively optimistic about is that we will see increased productivity from artificial intelligence applications, which could have a positive impact on growth and profit margins.”

Peter Oppenheimer pointed out that although both artificial intelligence and decarbonization are relatively new concepts, there are historical similarities. One prominent historical period was the early 70s and early 80s, which are “not much different” from current developments. He said that compared with the present, the rise in inflation and interest rates during that period may be more structural problems, but factors such as increased geopolitical tension, increased taxes, and strengthened regulations seem similar.

He explained that in other ways, current changes can be seen as a reflection of changes earlier in history. He said, “Since we are likely to see this huge double impact, that is, the positive impact of technological innovation at a very rapid pace, plus economic restructuring towards decarbonization, we think this period is more similar to the late 19th century.” He pointed out that infrastructure and technological development have promoted modernization and industrialization, and significant increases in productivity are signs of this historical period.

Above all, Peter Oppenheimer said, these historical similarities can provide experiences for the future. He said, “Looking back, cycles and structural fractures will indeed repeat themselves, but they will never be repeated in the exact same way. I think we need to learn the inferences we can see from history to best prepare for the kind of environment we are entering.”