Report
The euro zone must now stimulate its domestic demand
Beyond the coronavirus crisis, t he euro zone must now stimulate its domestic demand more. This could be done either by making fiscal policy more expansionary or by using Germany’s and the Netherlands’ excess savings to finance investments in the euro zone. For instance: The euro zone is benefiting from a positive supply shock (rise in the participation rate and therefore in the labour force and in employment), which requires a simultaneous positive demand shock; The euro zone is suffering the effects of weak global trade and global demand for industrial products. These two sources of weakness must therefore be offset with more vigorous domestic demand.
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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.
Patrick Artus
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