Report
Patrick Artus

What makes an economy resilient?

OECD countries' economies are subject to severe and frequent financial and health shocks. This raises the question: what makes an economy resilient to shocks? The economy’s resilience is probably explained by: The ability to run a very large fiscal deficit, which prevents an income collapse, bankruptcies and unemployment as much as possible, and therefore the central bank’s determination to monetise this deficit, without destroying the confidence in money; The existence of a social welfare and solidarity system that actually protects those who suffer the most from crises (young people, holders of short-term employment contracts, small self-employed, etc.); A banking system and a financial system that are robust enough to be able to continue to finance the economy even in crises and also to finance the necessary innovations; Companies that are able to withstand shocks, have large equity and liquidity reserves, keep their access to financing, and are able to continue to prepare for the future (investment, research, etc.) despite the crises, and also to avoid a loss of potential growth that threatens to follow crises; The overall ability to adapt to structural changes brought about by crises: for example, changes in the sectoral structure of the economy and jobs, changes in skills adapted to the needs of the economy, changes in the behaviour of economic agents (consumer, labour, etc.); changes in preferences (concern for the environment, for example ).
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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