What features will define the economy and financial markets in the 2020s after the COVID crisis?

We believe that the economy and financial markets in OECD countries will be structurally characterised after the COVID crisis by: Low potential growth, after the destruction of long-term growth wrought by the COVID crisis; Low inflation initially, but which could then rise due to population ageing, the reshoring of production and the energy transition; A continually expansionary fiscal policy, given the social problems created by the COVID crisis and new public investment needs; A continually expansionary monetary policy, given central banks’ new strategies and the need to continue to monetise fiscal deficits; Continually very low (negative) real interest rates, due to both the expansionary monetary policy and the wider situation of ex ante excess savings; Asset price bubbles, due to the expansionary monetary policies and very low real interest rates, and therefore a contradiction between sluggish growth and rising asset prices; High political and social tensions, if there is weak growth and therefore weak wage growth, legacies of the COVID crisis, at the same time as rapid wealth accumulation. All in all, a peculiar economic picture is painted: weak growth, sharply rising asset prices and returning inflation; continuation of highly expansionary economic policies, as governments and central banks lose their inhibition; and a constant tax on savers due to negative real interest rates .