Report
Patrick Artus

Who bears the costs of negative shocks: Households (employees), governments or companies?

OECD countries have just suffered two successive negative shocks: The fall in production due to the health measures linked to the COVID pandemic, in 2020; The rise in prices of commodities, electronics and transport in the post-COVID economic recovery. We seek to determine who bore the brunt of these shocks: wage earners/households, governments or companies? This analysis is necessary to assess the effects of these shocks, for example on inflation (which is a reaction by companies to a fall in their earnings), equity markets (protected from shocks if companies are protected ), demand (weakened if household purchasing power declines), etc. We see that: The 2020 shock (decline in production) was mainly borne by governments; The 2021 shock (commodity prices) was completely borne by households.
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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