Report
The new equilibrium is robust
The new economic equilibrium in OECD countries stems from low inflation, which allows interest rates to stay low even at full employment. This equilibrium is robust for two reasons: The low interest rates keep all economic agents solvent, even when the ir debt ratio is high , which eliminates the risk of recession, further improves borrower solvency and prolongs the equilibrium; The absence of a recession means that the very low interest rates at full employment are not a problem (they would be if there were a recession, as central banks would not be able to cut interest rates to boost the economy).
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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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