Report
The real issue is wage earners' bargaining power
The disinflation in the United States and the euro zone since the 1980s has not been due to monetary policies (there is no longer any correlation between money supply growth and inflation), but to the decline in wage earners’ bargaining power, which can be seen in various indicators (income distribution, deunionisation, labour market deregulation, decline in manufacturing employment, etc.). For the present inflation to become permanent, which would lead to a complete change in monetary policies, the COVID crisis would have to have restored wage earners’ bargaining power (if labour supply declines, a number of jobs are rejected). Are there signs of an upturn in wage earners’ bargaining power? Yes in the euro zone (real wages outpacing productivity, stagnant profits), but not in the United States (real wages rising much slower than productivity, sharp rise in earnings).
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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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