In an environment of very high debt ratios, it is a negative supply shock that is dangerous

We look at the situation of OECD countries. Since the 2009 crisis, the total debt ratio of these countries has remained very high. What is the biggest risk? A negative demand shock leads to a loss of confidence, but also to lower inflation and interest rates, which offsets some of the loss of growth; it is therefore not very dangerous; A negative supply shock leads to a loss of confidence and to higher inflation and interest rates; it is therefore much more dangerous in a high-debt-ratio environment than a negative demand shock. What could cause a negative demand shock? A rise in oil prices; a shortfall of the necessary capital accumulation; an increase in the corporate tax burden; population ageing; deglobalisation; supply chain problems for companies; a fall in productivity due to health constraints in response to the COVID epidemic.