Report
Patrick Artus

OECD countries: Can we know when the disaster will occur?

Given the level of debt ratios in OECD countries, a disaster would occur (for both lenders and borrowers) if inflation returned, leading to a significant rise in interest rates. The low unemployment rate in OECD countries has not yet caused wage inflation to return, especially because of the rise in the participation rate (the proportion of the working-age population present in the labour market), which prevents significant labour market pressure despite the low unemployment rate. It can therefore be argued that the disaster will occur when the participation rate stops rising, since wage inflation will then rise. How long can the participation rate rise further in OECD countries? If we look at the countries where it is highest, we see that it is possible that for the OECD as a whole, the participation rate may rise further for several years .
Provider
Natixis
Natixis

Based across the world’s leading financial centers, Natixis CIB Research offers an integrated view of the markets. The team provides support to inform Natixis clients’ investment and hedging decisions across all asset classes.

 

Analysts
Patrick Artus

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