The most important chart for understanding the effects of the crisis

To understand the effects of the crisis in OECD countries, we have to look at the chart that shows the expected level of gross domestic product by 2022, and compare it to what GDP would have been without the crisis, and not to what GDP was at the end of 2019. We then see that at the end of 2022, OECD GDP is still likely to be 4 % lower than potential GDP, i.e. there will probably still be a high level of under-employment at this date. This shows us that it is very unlikely that (core) inflation will be able to return in OECD countries by this date, contrary to what financial markets believe. Similarly, monetary and fiscal policies will remain expansionary. When we look at the situation of the large OECD regions in the same way, we see that the degree of under-employment at the end of 2022 remains significant everywhere.