Who will be the most negatively affected in the medium term by a permanent loss of GDP?
Like the subprime crisis, the COVID crisis will give rise to a permanent loss in the level of GDP compared to the level it would have had without the crisis (for example because there is an irreversible capital loss). The question is: who will be the most negatively affected by this permanent loss of GDP ? In the medium term, governments will not be able to maintain the current policy of shouldering the entire income loss; How the loss is shared between companies and households will then depend on their respective bargaining power. In the OECD as a whole, companies' bargaining power is greater than that of employees: earnings return to normal and the income loss is borne by employees, which is what happened already after the subprime crisis. But there are a few countries (France, Italy) where employees' bargaining power is strong: in these countries, it is earnings that will bear the brunt of the loss of overall income (of GDP) .