Household consumption, eroded by the extraction of rents and held in check by uncertainty about the outcome of reforms deeply affecting people’s lives, must regain its vigour. Never dealing with the problem of pensions definitively has a cost in terms of lost growth and lower consumption.
3 In her speech, she reviewed a body of literature that suggests that demand conditions can have persistent effects on supply. 4 In most of the literature, these effects are thought to occur through hysteresis in labor markets.