The Stimulus Deception | Rob Arnott Explains What Economists Are Getting Wrong

In this episode of Excess Returns, we welcome back Research Affiliates founder Rob Arnott to explore his provocative research challenging mainstream economic assumptions. Rob walks us through why government stimulus often fails to deliver real growth, how decades of rising spending have shaped today’s economic environment, and what the implications are for debt, deficits, and future returns. We also dive into trade policy, tariffs, and where Rob sees the best opportunities in today’s markets using Research Affiliates’ capital markets expectations.Full Paper:https://www.researchaffiliates.com/publications/articles/1080-stimulus-does-not-stimulate🎯 Topics Covered:Why stimulus doesn't always stimulate economic growthThe hidden cost of high government spendingLessons from Japan, Ireland, and the EU on fiscal policyWhy Keynes wouldn’t recognize today’s “Keynesianism”The role of stimulus during crises like COVID and 2008Tariffs as strategy vs. economic dragRob’s take on Trump, trade wars, and negotiating tacticsCrowding out: What debt does to private investmentResearch Affiliates’ expected returns across major asset classesWhy large-cap U.S. stocks may be the most overvaluedThe opportunity in value, small-cap, and international markets