Report
The permanent effects of recessions and crises are due to changes in stocks
A recession (we will take the example of the 2008-2009 recession in OECD countries, but we are obviously interested in the possible permanent effects of the coronavirus crisis) has permanent effects on economies’ situation because it changes stocks (if a stock of capital or debt is changed, the economic equilibrium will then be permanently different, which is not the case if there is only a change of flows) . This applies to: The productive capital stock, reduced by the decline in investment and by corporate bankruptcies; The human capital stock, reduced by rising unemployment; The stock of corporate debt, increased by the decline in revenues and earnings; The stock of public debt, increased by the fiscal deficits implemented in response to the recession.
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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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