Who will bear the burden of lost income if the economic crisis continues?
We look at OECD countries as a whole, but this analysis is valid for each individual OECD country. The economic crisis will probably be long-lasting, due to companies' difficulties , the long-lasting fall in activity in certain sectors and the loss of productivity caused by the health measures. It is unlikely that production will be normal in 2021. Who will then bear the income loss? In the short term in 2020, governments will bear the entire income loss as the increase in the fiscal deficit will cover the fall in GDP caused by the lockdown. This is obviously a macroeconomic calculation, as certain groups of economic agents may be very negatively affected; But what will happen in 2021? Either fiscal policies will continue to offset the entire household and corporate income loss ; Or this will not be possible despite central bank intervention, and the income loss will probably increasingly be borne by employees, as after the subprime crisis.