Report
Patrick Artus

The repetition of shocks explains why the economy is never at its long-run equilibrium

In the usual macroeconomic models, at the long-run equilibrium: Inflation is determined by money supply growth; The real interest rate balances supply and demand for goods and services; The relative prices of assets and goods are constant; External debt is stabilised by movements in the exchange rate. However, when one looks at economic trends over a long period of time, none of these long-run mechanisms is apparent. This situation can be interpreted in two ways: Either the usual macroeconomic models do not match reality; Or the economy never reaches the long run because there are always shocks that set off a short-run dynamics.
Provider
Natixis
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.

 

Analysts
Patrick Artus

Other Reports from Natixis

ResearchPool Subscriptions

Get the most out of your insights

Get in touch