Fortunately, investors, households and companies in the euro zone are cautious

Interest rates in the euro zone are far lower than the growth rate, and will in all likelihood remain so. This should normally lead to: For investors, a drastic switch to equities, leading to a n equity market bubble; For households, a sharp increase in debt to buy housing, leading to a sharp rise in real estate prices; For companies, a sharp increase in debt to invest, make acquisitions or buy back shares. Today, however, we are seeing: A fairly low valuation of European equities, as investors’ purchases of equities are zero in net terms; No increase in household debt, and a not yet very sharp rise in real estate prices; No increase in corporate debt and no net share buybacks by companies. This shows that the serious financial imbalances that can result from a very expansionary monetary policy are avoided for the time being thanks to the caution of investors, households and companies .