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The fall in the participation rate due to the COVID crisis may also have positive consequences
The Black Death, which began in the first half of the 14 th century, led to the death of 30 to 50% of the European population. The 1350s then saw a sharp rise in wages, the demise of serfdom, a fall in rents (the return on capital), i.e. a fairer income distribution and a modernisation of society. The COVID crisis has driven down the participation rate, with many people apparently no longer wanting to return to work. This has negative effects (fall in potential GDP and in per capita income), but it could also have positive effects like those set in motion by the Black Death: a more favourable income distribution for wage earners, a decline in excessive return on equity requirements , investments that drive up productivity gains, etc.
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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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