The global economy will enter new era

Subject

Economic transition in the 1970s and now.

Significance

Easy monetary policy, ‘productivity-less’ recoveries and financial fragility characterise developed economies today. These are not the same symptoms seen in the ‘stagflation’ of the 1970s, but their cause is the same: the breakdown of one economic model and the transition pains to whatever the next one will be.

Impacts

• The strength of the international economic system today compared to the 1930s makes a repeat of the Great Depression unlikely.
• Fintech will be one reponse to the financial sector's problems, just as the 1970s spurred technological solutions to oil reliance.
• A shift of economic power eastwards is leading to geopolitical rebalancing.