Euro zone: A proliferation of negative supply shocks

The euro zone is suffering from a proliferation of negative supply shocks: High energy prices, with high natural gas prices and oil prices supported by OPEC production cuts; Declining labour productivity; Shrinking working-age population; A decline in educational attainment and, ultimately, in labour force skills; Declining corporate capital accumulation. These multiple negative supply shocks, which will be permanent, will make it much more likely that the euro zone will experience excess demand, i.e. fairly high inflation.