The low inflation is due to structural causes as yet unchanged by the COVID crisis

Inflation (we look at the United States and the euro zone) has a cyclical component. In particular, inflation always surges after recessions, like at present, because companies make up for the price increases they were unable to carry out during the recession and because commodity prices pick up. But the low level of inflation since the 1990s is due to structural causes: The decline in wage earners’ bargaining power, leading income distribution to skew against wage earners and causing the degree of wage indexation to prices to decline sharply; Excess savings ( ex ante of course) over investment at the global level, corresponding to a weakening of global demand, whi ch is obviously disinflationary; Digitalisation (associated with automation), which d r ives down prices. There is currently no sign of these two structural causes of low inflation disappearing: real wages have been weakened by the crisis, there is still no visible indexation of wages to prices; the private sector savings rate has risen sharply and digitalisation has accelerated markedly .