Report
Patrick Artus

There are currently serious anomalies (serious deviations from the expected long-term relationships) in several economies: How can they correct?

In OECD economies there are currently significant anomalies from what we normally expect as long-term relationships: The very significant gap between risk-free real interest rates and the return on equity , while they should be identical at equilibrium; The divergence between the trend in goods prices and in asset prices, while they should move in parallel in the long term; The divergence between the trend in real wages and in labour productivity, while income distribution should be stable in the long term. How will these anomalies correct? There will inevitably be restoring forces: Either through a sharp increase in investment, or through a sharp rise in the risk premium that is included in companies’ return on equity; Through a bursting of asset price bubbles; Through political change , leading to a change in labour market policies.
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

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