The euro zone has suffered a shock of rising risk aversion since the 2008-2009 crisis

The euro zone is currently suffering from high risk aversion, which explains: The growing gap between return on equity and risk-free long-term interest rates; The rise in the equity risk premium; Companies’ deleveraging and increase in cash reserves, household deleveraging. High risk aversion inevitably leads to low long-term growth. The hysteresis of the 2008-2009 crisis therefore works through this shock to risk aversion .