Now that people feel richer, will they borrow and spend more? And, if so, how much more? Will "animal spirits" — what economists call a surge of optimism that can jolt economies to faster growth — come back?
Maybe, if there are more people like 63-year-old Sahoko Tanabe of Tokyo, a new buyer of stocks, and an unlikely one.
Like many Japanese, she last loaded up on stocks in the late 1980s, right before the country's main stock index began a two-decade swoon to a fifth of its value. She's feeling more optimistic now. "Abenomics," a mix of fiscal and monetary stimulus named for Japan's new prime minister, has ignited the Japanese stock market, and Tanabe has discovered a new appetite for risk.
"You're bound to fail if you have a pessimistic attitude," she says.
But for every Tanabe, there seem to be more people like Madeleine Bosco, the Californian who sold her stocks and ditched many of her credit cards. "All of a sudden you look at all these things you're buying that you don't need," she says.
Attitudes like Bosco's will make for a better economy eventually — safer and more stable — but won't trigger the jobs and wage gains that are needed to make economies healthy now.
"The further you get away from the carnage in '08-'09, the memories fade," says Stephen Roach, former chief economist at investment bank Morgan Stanley, who now teaches at Yale. "But does it return to the leverage and consumer demand we had in the past and make things hunky dory? The answer is no."