After the COVID crisis, the divergence between purchasing power and asset prices will lead to strong political tensions

We look at the case of the euro zone, but our analysis holds for all OECD countries. After the COVID crisis, we expect to see: On the one hand, a rise in unemployment and, more permanently, a fall in potential growth and therefore in purchasing power gains; On the other hand, a sharp rise in asset prices fuelled by the abundance of liquidity and negative real interest rates. This trend divergence between purchasing power and the value of wealth will probably give rise to strong political tensions.