[triangleman]

Yes, in the long run the economy is driven by productivity growth. However there are debt cycles at work:

https://economicprinciples.org/

The world may be near the end of a long-term debt cycle, we will have to see.

In 1996 PE multiples were indeed high and there was indeed a correction. For instance the Nasdaq went from 1300 at the end of 1996, to over 5000, and back to 1300 in 2002. There was obviously productivity growth over 7 years, but valuations are another thing entirely.

[habitue]

Just a disclaimer for people reading, `economicprinciples.org`, despite having a very official sounding name, is presenting Ray Dalio's theories, not widely held economic principles.

None of it seems to me (although I am not an economist), but it should probably be taken with a grain of salt.