In your opinion, will the macroeconomic outlook for the global economy in the long term be dominated by optimistic or pessimistic factors?
What are the key determinants of pessimistic and/or optimistic macroeconomic forecasts for the global economy in the long term, i.e. over the next few to several years?
There are both optimistic and pessimistic factors in macroeconomic forecasts for the world economy over the long term. Depending on how they operate and which prevail, either more optimistic or more pessimistic scenarios are developed for the development of the projected economic situation realised in the future. In terms of optimistic factors, these include the use of new information technologies, Industry 4.0 and others, which, when implemented in companies and enterprises, allow for improved profitability of business processes, increased production scale, improved quality control systems and/or improved quality of product and service offerings, etc. Besides, the green transformation consisting in the development of renewable and emission-free energy sources and based on rapidly cheap green energy technologies and on generating savings in energy consumption contributes to economic efficiency and energy security. In addition, the development of sustainable economic processes, scaling up the sharing economy, improving waste separation systems, reusing recovered secondary raw materials, improving and scaling up industrial recycling, etc. will also generate savings in the consumption of raw materials and energy in the context of an efficient economy. In this way, savings will be generated that will allow for an increase in the scale of financial subsidies directed to special purpose funds supporting the development of pro-climate and pro-environmental economic ventures and the development of green economic sectors. Pessimistic factors, on the other hand, include the retreat of economic globalisation from the onset of the pandemic, the rise of economic isolationism, the prospect of deepening trade wars between the world's major economies, the introduction of prohibitive tariffs to protect domestic labour markets, the successive reduction in the scale of cross-border transfers of strategic raw materials, components, prefabricated products and technology, etc. The reduction in the scale of the international transfer of products and services, international trade also involving factors of production, strategic raw materials was already noticeable a few years before the coronavirus pandemic (Covid-19), and during the pandemic through disrupted chains of international supply and procurement logistics the scale of intermodal logistics, international trade decreased. It also resulted in the shortening of international supply and procurement logistics chains and the development of domestic industries supplying the necessary sub-assemblies and pre-fabricated components used in the production of various goods, products, mainly technological products composed of many sub-assemblies.
Such problems determining the deepening of trade wars and the backsliding of economic globalisation processes at the end of February 2022 are increased by a full-scale military war in Ukraine. This kind of war generates economic uncertainty, and uncertainty is an increase in the scale of economic risks that are difficult to measure, not easy to quantify, and holding back investment. In addition to military sectors, apart from companies producing weapons and equipment for the military, it is in many other sectors and industries of the economy that the aforementioned increase in uncertainty becomes a limiting factor for the development of investment and economic activity. On the other hand, when the war ends and the processes of reconstruction of Ukraine's economy begin, there will be a significant recovery of economic processes in some sectors of the economy, such as construction and heavy industry. However, it is unclear when the war will end. In addition to this, determinants contributing to the deepening downturn of the economy include continued elevated inflation at double-digit levels. In the context of high consumer inflation, the high proportion of core inflation determined by domestic factors is a matter of concern. In addition to this, there remains a high level of risk of further investment bank failures in a situation of falling stock market valuations of previously issued government bonds with fixed and significantly lower interest rates on new series of government bonds being issued than at present. Consequently, there is still a high level of uncertainty about the development of the economic situation in the financial markets, including the capital markets, the stock markets on which securities are priced.
In view of the above, I would like to address the following question to the esteemed community of scientists and researchers:
What are the key determinants of pessimistic and/or optimistic macroeconomic forecasts for the global economy in the long term, i.e. over the next few to several years?
In your opinion, will macroeconomic forecasts for the world economy in the long term be dominated by optimistic or pessimistic factors?
In your opinion, will the global economy emerge from the crises in the next few years or will the crises get worse?
What do you think about this topic?
What is your opinion on this subject?
Please respond,
I invite you all to discuss,
Thank you very much,
Best wishes,
Dariusz Prokopowicz
I think it is starting to recover with different degrees from one country to another. It takes time.
The recovery or deepening of global economic crises in the next few years will depend on various factors, including government policies, global events, and the effectiveness of measures taken to address the crises. Economic crises can have different causes, such as financial market instabilities, recessions, natural disasters, or geopolitical conflicts.
In the past, the global economy has experienced periods of crisis followed by recovery. For example, after the 2008 financial crisis, many countries implemented measures to stabilize their financial systems and stimulate economic growth. Over time, most economies managed to recover, although the pace and extent of recovery varied across countries.
It's important to note that the global economy is complex and influenced by numerous interconnected factors. While some experts may predict a positive trajectory for the economy, others may have concerns about potential risks and challenges. Factors such as geopolitical tensions, trade disputes, technological disruptions, and environmental issues can impact economic conditions.
It's advisable to consult experts and reliable sources for up-to-date analysis and forecasts on the global economy. They can provide more nuanced insights into specific crises and their potential outcomes.
I believe that (unchecked) the threat of an almost indiscriminate roll-out of AI applications on a global scale will drive an unwarranted level of normalisation. This is because AI's algorithms are based on a dialectic rationalisation which embeds bias, value and assumptions that are not so generalisable.
A consequence of this forced, negentropic normalisation is to render more marginalisation within the populations it purports to serve. Increasingly, some sectors of the population will experience greater economic pessimism, while a reducing element will appear to be relatively optimistic about their situation.
The gap between pessimism and optimism will widen and be seen, increasingly, as a source of conflict and concern. The impact may be gradual, but my feeling is we need more critical thinking about how we develop and deploy AI-driven solutions. In this, I have ChatGPT's agreement.
An interesting economic prospect provided by the World Bank
https://www.worldbank.org/en/publication/global-economic-prospects
Another interesting economic outlook as provided by the IMF
https://www.imf.org/en/Publications/WEO#:~:text=World%20Economic%20Outlook%2C%20April%202023%3A%20A%20Rocky%20Recovery&text=Description%3A%20The%20baseline%20forecast%20is,at%203.0%20percent%20in%202024.
It is difficult to predict the future of the global economy. However, according to the United Nations, the global economic recovery remains precarious. In 2020, the world economy shrank by 4.3 percent, over two and a half times more than during the global financial crisis of 2009. The modest recovery of 4.7 percent expected in 2021 would barely offset the losses of 20201.
There is enormous uncertainty for the world economy: firstly, the Ukraine war has led to huge supply chain problems, secondly, the war has led to various sanctions against not only Russia but also some countries aligned with it. Thirdly, the increasing rates of inflation in the world economy has led to many governments introducing measures to reduce aggregate demand which will lead to a slowing down of the world economy. That in turn (plus the increasing uncertainty) will likely lead to a fall in private sector investment. All these factors make the possibility of a downturn in the economies of the world, and perhaps a world recession. However, this is not a forecast based on any econometric model but simply an intelligent guess!
The global economy has been facing multiple crises in recent years, including the COVID-19 pandemic, geopolitical tensions, trade disputes, climate change, and rising inequality. These crises have had significant impacts on global economic growth, trade, investment, employment, and poverty reduction.
While the global economy has shown some signs of recovery, such as the rebound in economic activity and trade, the deployment of vaccines, and the fiscal and monetary stimulus measures, the recovery has been uneven and fragile. Some countries and sectors have been more resilient and adaptive to the new normal, while others have been hit harder and face long-term challenges.
The outlook for the global economy in the next few years depends on various factors, such as the trajectory of the pandemic, the effectiveness of the vaccine distribution, the sustainability of the fiscal and monetary policies, the progress in structural reforms, and the cooperation among countries. The risks of the crises deepening, such as new variants of the virus, geopolitical conflicts, trade barriers and social unrest, cannot be ruled out.
Therefore, the recovery of the global economy is likely to be a complex and gradual process, with ups and downs, uncertainties and trade-offs. It will require a coordinated and adaptive approach from policymakers, businesses, workers, and citizens, based on evidence-based and inclusive strategies.
@Dariusz Prokopowicz
Recovery may take years and it depends on the strategies implemented by the different economies.
Economic crisis is steep and sharp but recovery path is gradual, slow and take times.
One possible answer to your question about "present global economic crises" is the book "Principles for Dealing with the Changing World Order: Why Nations Succeed and Fail", November 2021, an extremely interesting analysis of economic waves/cycles, apparently based on System Dynamics modelling, carried out by a team led by Ray Dalio, a successsful hedge fund investor, and billionaire.
Another possible answer to your question is "The Great Reset", July 2020, by Klaus Schwab, the well-known founder of the World Economic Forum, in 1971.
The aforementioned books take the stance that what is happening to the global economy right now is mere evolution, and that there are no crises at all. In this sense, it is simply a process of "creative destruction" (Schumpeter), just a change. The word "crisis" has a negative connotation which expresses the feeling of most people, of feeling unconfortable with change. But it is actually an extremely positive (and necessary) process of evolution. Maybe we are just witnessing a change in imperial power and reserve currency as discussed in chapters 11 and 12 of the first book mentioned above, the title of which is, respectively, "The Big Cycle Rise and Decline of the United States and the Dollar" and "The Big Cycle Rise of China and the Renminbi".
We are talking about human beings here. The economy is doing well and the planet is doing well. It may be useful to keep in mind the difference between these three things. When it is said that we need to "save the planet" or that we need to "solve the global economic crises", we are actually talking about people, indirectly. The planet has witnessed the extinction of several species (genetic codes) like for instance the dinossaurs. And the global economy has witnessed the extinction of several civilizations (cultural codes) like for instance the Ancient Egyptians. Therefore, who is afraid are actually people. The economy and the planet are safe and sound.
With respect to stock markets, already in October 8, 2017, almost six years ago, Financial Times published an interview ("Wolfgang Schäuble warns of debt-driven global financial crisis") with German finance minister Wolfgang Schäuble, which is available at its website, where he was warning against a serious financial bubble. And during the past two years and a half, several famous financial analysts have been warning publicly about this same bubble, with countless videos and interviews available on YouTube. Therefore, nobody should be surprised if that which is being foreseen (and warned about) for several years actually happens. Whoever is losing money in stock market, is doing so consciously.
Ricardo: we cannot live with an attitude of "what will be, will be" or "que serra, serra "!
Climate change is happening and we need to change our activities to slow it down.
Raja, you are right, I fully agree with you. What happened is that only the first half of my answer has been uploaded. And even this I had to cut in 5 pieces. For some reason, unknown to me, the second part could not be uploaded, as files could not be attached. It contains original research, to be published as a book, within a year or so.
Basically, it may be argued that Capitalism, as an economic system, ended in 1971. From the perspective of the new economic system that substituted it, there is no crisis at all. The core elements described in "The Protestant Ethic and the Spirit of Capitalism" (Max Weber, 1905) were changed to new ones, some of them described in "The Economics of the Coming Spaceship Earth" (Kenneth Boulding, 1966).
In addition to my previous comments, there is a high probability that we are going down to 2 billion people during the next 50-100 years. I wrote on that topic in my 2009 book "Real Environmental Policies: How Good Intentions May Give Rise to the Construction of Systemic Wars", which exists only in Portuguese, because I wrote it for the Brazilian Development Bank.
The global economy will certainly recover the crises in the next few years by increasing food and energy, maintaining favourable environment,keeping social justice, equity and peace, and there by achieving sustainable economic growth.
El mundo suele transitar los ciclos expansivos, esta vez está en un ciclo contractivo, donde el centro inflacionario está en los precios de los combustibles y los alimentos. Los países deben mantener una prudencia fiscal y antes bien recurrir a instrumentos de política monetaria para mitigar los shocks externos para cada economía.
The COVID-19 pandemic and its associated crises have had a significant impact on the global economy, leading to widespread job losses, business closures, and disruptions in trade. The extent and duration of the economic impacts will depend on various factors including the severity and length of the pandemic, the effectiveness of government policies, and the willingness and ability of individuals and businesses to adapt to the new economic realities.
Though there has been significant uncertainty regarding the future of the economy, we have seen the global economy begin to recover in 2021, indicating a positive outlook. But it is also important to note that the road to recovery may be slow and bumpy since many businesses and industries have been hit hard. Furthermore, the economic recovery may be uneven across different sectors, regions, and countries, which could lead to longer-term negative consequences.
Overall, the full extent and duration of the impact of the crises on the global economy are difficult to predict with certainty, and much will depend on how the world continues to tackle the ongoing uncertainties and navigate the challenging circumstances that arise.
The global economy has been affected by several crises in the past few years, including the COVID-19 pandemic, climate change, and geopolitical tensions. While some countries have been able to recover from these crises, others are still struggling. The International Monetary Fund (IMF) has projected that the global economy will grow by 4.9% in 2022. However, this growth is expected to be uneven across countries and regions.
The global economy is in V shape recovery, as far as the COVID-19 pandemic is concern, however the Ukraine war which have obvious consequences to the global economy, especially Europe prolong the recovery process. Dariusz Prokopowicz Chuck A Arize Khambai Khamjalas
الازمات العالمية تؤثر بشكل كبير على الوضع الاقتصادي العالمي سواء ان كانت صحية مثل جائحة كورنا او اقتصادية مثل ازمة الكساد الكبير او التطور التكنولوجي الذي ادى الى تسريح العديد من العاملين لذا يتوقع ان تزداد حدة الازمات العالمية بالرغم من ان التطور التكنولوجي والعلمي له دور كبير في زيادة الانتاج لكن في المقابل توجدبطالة عالية عالمياًحيث تصل الى مايعادل 5.8%وهذا دعا العديد من الافراد الى القبول بوظائف بأجور زهيدة
اضافة الى العديدمن النزاعات السياسية والحروب بين البلدان التي تقع اثارها على الاقتصاد العالمي
A deepening of the world economic crisis is to be awaited, dear Dariusz Prokopowicz , as key structural and systemic problems of the international economy are not being cured, due to decreasing cooperation among the major economic drivers.
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No very deep knowledge of economics is usually needed for grasping the immediate effects of a measure; but the task of economics is to foretell the remoter effects, and so to allow us to avoid such acts as attempt to remedy a present ill by sowing the seeds of a much greater ill for the future.
Lv Mises
Using 'crisis' indicates it seems a lowering of lifestyles rather than say the absence of food supplies, or genuine economic problems. Are we not referencing a change in lifestyle, rather than a crisis which actually affects only the wealthiest countries?
I cannot predict the future with certainty. The trajectory of the global economy can be influenced by a wide range of factors, some of which are unpredictable or subject to change. It's essential to consider the complex dynamics at play, such as government policies, global trade, geopolitical relations, technological advancements, health crisis management, and social considerations. These factors will collectively shape the recovery or potential deepening of the crises in the coming years.
Το πρόβλημα που θα έπρεπε να μας αφορά αυτήν την στιγμή θα έπρεπε να είναι το γεγονός της προδιάθεσης της Οικονομίας της Παγκοσμιοποίησης για Πόλεμο η Ειρήνη . Αν λοιπόν η μεγιστοποίηση του Κέρδους για τα Παγκόσμια Ολιγοπώλια αυξάνουν κατα την περίοδο Πόλεμων θα έχουμε Πόλεμους και εαν αυξάνεται με την Ειρήνη θα έχουμε Ειρήνη . Το ερώτημα που θα πρέπει λοιπόν να απασχολήσει όλους εμάς που υπηρετούμε την Οικονομική και Περιφερειακή επιστήμη είναι να αναλύσουμε τα οικονομικά κέρδη των παγκόσμιων κολοσσών σε Περιόδους Κρίσης η σε περιόδους Παγκόσμιας Ηρεμίας . Τι τελικά δεν καταφέραμε να καταλάβουμε για την Παγκόσμια Ειρήνη ως ανθρωπότητα απο τα λάθη του Β Παγκόσμιου Πολέμου? Η Τελικά τι αντιληφθήκαμε ως Κέρδος κατα την Διάρκεια του Πολέμου? Dariusz Prokopowicz