International Monetary Fund Managing Director Kristalina Georgieva attends a session at the World Economic Forum annual meeting in Davos on January 17, 2023. The world economy, she warned last year, is facing “perhaps its biggest test since the Second World War.” PHOTO | FABRICE COFFRINI | AFP
A host of interconnected “megathreats” is imperilling our future. While some of these have been long in the making, others are new. The stubbornly low inflation of the pre-pandemic period has given way to today’s excessively high inflation.
Secular stagnation – perpetually low growth owing to weak aggregate demand – has evolved into stagflation, as negative aggregate supply shocks have combined with the effects of loose monetary and fiscal policies.
