Natixis’ latest FTSE Global Markets blog uses the Schmidt theorem to explain the French economy

PatrickArtusIn Patrick Artus’ latest blog, he examines Helmut Schmidt’s famous theorem of “the profits of today are the investments of tomorrow and the jobs of the day after tomorrow” to assess today’s French economy. As a proponent of Keynesian economics, Schmidt advocated expansionary monetary and fiscal policies that aimed to reduce unemployment in the late 1970’s.

Currently, French companies are riding the wave of low energy prices and a depreciated euro, which has given rise to the profitability and self-financing capacity of French companies. Yet, though there seems to be a rise in investment intentions amongst the French industry, the region is still waiting to see an improvement in employment – a concern that is becoming ever more pressing for both society and policy-makers alike. Indeed, is this theorem applicable to today’s French economy, or will today’s profits continue to be wasted?

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