The ingredients of the coming social crisis in OECD countries

The COVID crisis will in all likelihood speed up developments that will help trigger a social crisis in OECD countries, beyond purely cyclical factors: A weakening of potential growth, and therefore a weakening of growth in real wages and of the standard of living; A highly expansionary monetary policy being maintained, leading to a rise in financial and real estate asset prices and increased wealth inequality; Companies' determination to restore their earnings level despite the lasting decline in GDP, leading to a further skewing of income distribution against employees and another wave of offshoring and deindustrialisation; A lasting deterioration in the situation of a number of business sectors, leading to a loss of the value of certain skills.