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What Next for the Post Covid Global Economy: Could Negative Supply Shocks Disrupt Other Fragile Systems?

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  • William White

Abstract

There is a reasonable likelihood that that the next global economic crisis could threaten the future of democracy. The economic system is a complex, adaptive system (CAS) subject to "tipping points" when underlying stresses lead to crisis. Moreover, the economic system is nested within a number of other CAS; political, environmental and public health among others. Looking forward, recurrent negative supply shocks imply a dangerous future of higher real interest rates and debt distress leading to either deflation (private debt distress) or higher inflation (sovereign debt distress). Such problems could threaten democratic political systems that are already showing signs of significant stress themselves. The paper finishes with some reflections on policy alternatives.

Suggested Citation

  • William White, 2023. "What Next for the Post Covid Global Economy: Could Negative Supply Shocks Disrupt Other Fragile Systems?," Working Papers Series inetwp199, Institute for New Economic Thinking.
    • Handle: RePEc:thk:wpaper:inetwp199
    DOI: 10.36687/inetwp199
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    References listed on IDEAS

    as
    1. Viral V. Acharya & Matteo Crosignani & Tim Eisert & Christian Eufinger, 2020. "Zombie Credit and (Dis-)Inflation: Evidence from Europe," NBER Working Papers 27158, National Bureau of Economic Research, Inc.
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    More about this item

    Keywords

    Covid; financial system; supply shocks; inflation; sovereign debt; climate change;
    All these keywords.

    JEL classification:

    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • F34 - International Economics - - International Finance - - - International Lending and Debt Problems
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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