The private sector has been cautious in OECD countries despite the very expansionary monetary policies

For the past 10 years, monetary policies have been very expansionary in OECD countries. The logical consequence of this choice by central banks ought to have been a sharp rise in debt ratios, and numerous asset price bubbles. But we note on the contrary that the private sector has deleveraged in OECD countries, that equity valuations are not unusually high, and that there are few cases of abnormally high real estate prices. This caution of the private sector in OECD countries: Greatly reduces the risk of a financial crisis; But has made the very expansionary monetary policy rather ineffective, because it has not boosted borrowing and it has had limited effects on asset prices (limited wealth effects). The caution of the private sector in OECD countries contrasts with the lack of caution of the public sector.