A key question for economic policies in France: Can supply-side problems be corrected by stimulating demand?

France is one of the OECD countr ies where the presence of supply-side problems is clearest: low productivity gains, low labour force skills and employment rate, declining industrial production capacity, low level of corporate modernisation, declining market shares, etc. Yet, France has for 20 years conducted demand-stimulating policies: fiscal deficit and increase in the public debt, low interest rates and growing debt ratios, real wages outpacing productivity. These long-lasting policies aimed at stimulating demand have in no way corrected the supply-side problems (we could have imagined that they would drive up the employment rate or productivity gains), and it is therefore time to switch to supply-side policies. Based on the experience from France, the idea that stimulating demand can correct supply-side problems must be rejected.