Wharton professor Jeremy Siegel expects a "spending boom" to occur in 2021 as pent-up demand from consumers and increased liquidity is unleashed on the economy once a successful vaccine is developed.

He also predicts that the stock market still has "a ways to go" even as it approaches record all-time highs.

Siegel also told CNBC that the increased liquidity from central bank policies in response to the COVID-19 pandemic will flow into stocks, pushing them past record highs.

"I think all this money is going to be flowing right into the economy and into the stock market," Siegel said.

With bond yields near record lows, there is no alternative to stocks, Siegel explained.

Meanwhile, Siegel the spending boom "is going to be the start of a new expansion," but the new economy is going to look a lot different than it did in 2019.

"The world has permanently shifted, even after this virus disappears," Siegel concluded.

Siegel made a similar prediction on a recent  Bloomberg Radio podcast hosted by Barry Ritholtz.

Siegel said “as the economy opens up, as therapeutics and/or vaccines get developed that reduce that fear, you will see the so-called cyclical economy sensitive stocks do better clearly.” 

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