Profile of the economic recovery: It is important to understand what a "state variable" is

Some economic variables are flows, which can vary very rapidly (production, consumption, exports, investment, etc.); other economic variables are "state variables" which are very inert (they are stocks and not flows). It is the state variables that transmit the memory of past economic developments: when they have been changed, the future economic trajectory is transformed. When trying to determine the profile of the economic recovery after the COVID crisis, we should therefore seek to identify the changes made by the crisis to the state variables, for example: Companies' capital stock, reduced by the decline in investment and bankruptcies; The stock of human capital, reduced by unemployment and the persistent problems in certain business sectors; The stocks of public and corporate debt, increased by the crisis; The level of the money supply, which has also increased as a result of the crisis. All these changes in the state variables, with the exception of the latter, point to lower growth in the aftermath of the COVID crisis .