The World’s Anti-Recession Guardrails Are Weaker Than Ever
After years of repeated economic shocks, the world has been left woefully unprepared to deal with the next one.
For decades, global economic crises have prompted the world to band together. During the Great Recession, central banks rode to the rescue with massive monetary stimulus as international leaders drew up a coordinated response. A dozen years later, pandemic-era governments built on those 2007-08 learnings, adding unprecedented fiscal spending to the mix.
Today, though, as central bankers and heads of state contemplate the potential fallout from the Iran war and the biggest energy crunch in half a century—or whatever cross-continental crisis comes next—it looks increasingly unlikely there’ll be another spurt of unified action. The spirit of cooperation is no longer there, and even if it were, there are major questions as to whether countries could even afford it. After years of responding to economic shock after economic shock, we’ve been left woefully unprepared to deal with another one.