The structural changes in the functioning of contemporary economies

Structural changes in the functioning of the economy have considerable effects on financial markets. It is therefore important to identify them. They are: 1. The disappearance of the correlation between the economic cycle and core inflation, which is not sufficiently perceived by financial markets at present. 2. The choice to keep economic policies expansionary throughout economic cycles, leading public debt ratios and the money supply to diverge on the upside and to a muted rise in interest rates even when the unemployment rate is low, albeit with little visible effect on potential growth. 3. A shift from the old correlation between the money supply and goods and services prices to one between the money supply and asset prices. 4. The ability of companies to restore their financial situation very rapidly after a crisis, which is positive for credit and equity markets. 5. The central role of international capital flows in explaining the situation of emerging countries and the ability of the United States to finance its deficits.