The shift to a higher-inflation equilibrium in OECD countries would have very damaging consequences

Mounting scarcit y mean s that the possibility of OECD countries shifting from a low-inflation equilibrium (2010s) to a high-inflation equilibrium (from 2021) must be seriously considered . This would have highly negative consequences: It would force central banks to choose between a significant increase in real interest rates or abandoning their inflation target; If the choice is made to increase the real interest rate to keep inflation at 2%, then fiscal policy will be prevented from acting by the rise in real interest rates at a time when : Governments will want to continue to support purchasing power (the scarcities responsible for the shift to the higher-inflation regime are leading to a lasting rise in the prices of energy, food, etc.); Huge investments with low financial returns must be financed to carry out the energy transition; If the choice is made to not raise interest rates and to abandon the inflation target, there are also a number of dangers: loss of purchasing power if incomes are poorly indexed or runaway inflation if they are well indexed; financial instability (asset price bubbles, debt, drastic exchange rate movements, etc.); poor investment choices.