Artus – This high price already paid for low inflation

OThere is much concern today in the countries of the Organization for Economic Cooperation and Development (OECD) about the return of inflation and, consequently, of more restrictive monetary policies. These policies pose a problem for all those who are indebted – States, households and businesses, in particular – because they can drive down stock market prices as well as real estate prices and pose the threat of a financial crisis.

But before worrying about inflation and its consequences, we must remember what the price had to be paid, in the OECD countries, to obtain disinflation and therefore the ability to keep interest rates low. Low inflation since the 1990s is essentially the result of three mechanisms that…