Return of inflation to be linked with neoliberal capitalism end – Natixis

Neo-liberal capitalism has managed to disinflation, connected to the choices made to improve profitability and extremely low real interest rates, which mean wealth collection.

 A shift to different equilibrium, with higher expansion, interest rates close to the growth rate, and reduced wealth difference would require an end to neo-liberal capitalism, per Natixis.

Important quotes

important quote on inflation

“The goal of neoliberal capitalism is mainly to increase corporate profitability to achieve a high profit on equity for the shareholder. With this purpose, neo-liberal capitalism has achieved: skewing of income division against wage earners and, consequently, low wages; offshoring to low-labor-cost rising countries in order to lessen production costs; tax competition between countries, with more inexpensive taxes on profits in particular; strong investment in fossil fuels, the cost of which is inexpensive and corporate concentration allowing monopoly rents to be achieved.”

“While the corporate company is inflationary, all the other aspects of neoliberal capitalism are disinflationary. Disinflation has allowed central banks to keep interest rates extremely moderate and also allowed real interest rates to remain so cheap, which describes the second aspect of neoliberal capitalism: capital accumulation due to a rise in asset prices and increased revenue inequality.”

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