Report
Patrick Artus

What could cause inflation to return today?

The current absence of inflation in OECD countries has considerable implications: interest rates remain very low , very high debt ratios can be maintained , there is no mechanism that could trigger a recession. This begs the question : what could cause inflation to return? A change in the functioning of labour markets, with wage earners regaining bargaining power. But if one country alone made such a change, it would face problems with rising labour costs in a world of strong competition between countries (this would be the case in particular for the euro-zone countries, which would not be able to devalue); A rise in energy prices due to the energy transition: purely renewable energy will be much more expensive than the energy available today; Protectionism, if it put a halt to OECD countries’ imports of cheap products from emerging countries.
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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