Lhe Covid-19 crisis has led, in all the countries of the Organization for Economic Co-operation and Development (OECD), to massive interventions by central banks and States in the functioning of economies and in the choices of economic agents. It was therefore asserted that the pandemic had sounded the end of economic liberalism, that is to say of a system where households and businesses freely pursue their objectives, and are not prevented by States from making the choices. which seem appropriate to them.
Central banks in developed countries have chosen to keep interest rates very low (ten-year interest rates in the OECD are now on average below 1%, while nominal growth will be at least 7% in 2021), buying massive amounts of bonds. This has enabled States to generate public deficits (at least 13% of the gross domestic product of the OECD in 2021) and very high public debt ratios, while ensuring the solvency of public and private borrowers. Central banks have also decided to participate in the acceleration of the energy transition by favoring “green” debts or “green” corporate debts in their financing.
The economic intervention of States, beyond the definition of health rules, is just as impressive. Expansionary budgetary policies (transfers, subsidies, financing of short-time working, etc.) have avoided a decline in household income despite the recession: on the contrary, the purchasing power of household income in the OECD increased by 3% in 2020 These aids have also preserved corporate profits.
Interventions “within the framework”
States have also guaranteed loans to companies (for nearly 140 billion euros in France) and have, through the various recovery plans, financed strategic investments (drugs, electronics, medical equipment), financed relocations, affirming thus their desire to depend less on global value chains.
Finally, in the United States and in Europe, governments have taken the decision to accelerate the energy transition and to tighten environmental climate standards.
Central banks and States have therefore indeed greatly increased their intervention in the decisions of households and companies, and in the general development of the economy. But have we gone so far to an interventionist economy?
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