{"id":62540,"date":"2022-04-26T08:42:01","date_gmt":"2022-04-26T13:42:01","guid":{"rendered":"https:\/\/olduvai.ca\/?p=62540"},"modified":"2022-04-26T08:42:01","modified_gmt":"2022-04-26T13:42:01","slug":"the-gathering-stagflationary-storm","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=62540","title":{"rendered":"The Gathering Stagflationary Storm"},"content":{"rendered":"<div class=\"grid-container\">\n<div class=\"grid-x grid-padding-x  \">\n<figure class=\"cell image image--lead image--ratio-2-1   \"><picture class=\"fbg-image__element\"><img loading=\"lazy\" decoding=\"async\" class=\" lazyunload lazyloaded\" src=\"https:\/\/webapi.project-syndicate.org\/library\/873a3360da07b743fd1fa84aabc3dc83.jpg\" alt=\"roubini163_STEFANI REYNOLDSAFP via Getty Images_gas prices\" width=\"320\" height=\"160\" data-src=\"https:\/\/webapi.project-syndicate.org\/library\/873a3360da07b743fd1fa84aabc3dc83.jpg\" \/><\/picture><span class=\"image__copyright\">STEFANI REYNOLDS\/AFP via Getty Images<\/span><\/figure>\n<\/div>\n<\/div>\n<div class=\"grid-container\">\n<div class=\"grid-x grid-margin-x fbg-image article__container\" data-sticky-target=\"interaction-article\" data-page-area=\"article-top\" data-sticky-offset=\"20%\" data-scroll-area-container=\"main\">\n<h3 class=\"small-12 medium-10 medium-offset-1 large-8 large-offset-2 xlarge-7 cell article__title article__title--main u-mb-se\" dir=\"ltr\"><a href=\"https:\/\/www.project-syndicate.org\/commentary\/world-economy-stagflationary-perfect-storm-by-nouriel-roubini-2022-04\">The Gathering Stagflationary Storm<\/a><\/h3>\n<div class=\"small-12 medium-10 medium-offset-1 large-8 large-offset-2 xlarge-6 xlarge-offset-3 cell u-mt-se\">\n<div class=\"article__abs u-mt-se\" dir=\"ltr\">\n<p>While recent shocks have made the current inflationary surge and growth slowdown more acute, they are hardly the global economy\u2019s only problems. Even without them, the medium-term outlook would be darkening, owing to a broad range of economic, political, environmental, and demographic trends.<\/p>\n<\/div>\n<div class=\"article__body article__body--commentary  english\" dir=\"ltr\" data-page-area=\"article-body\">\n<p data-line-id=\"d5e99e7535dd4b0c9bc07d1b51e36d1d\">NEW YORK \u2013 The new reality with which many advanced economies and emerging markets must reckon is higher inflation and slowing economic growth. And a big reason for the current bout of stagflation is a series of negative aggregate supply shocks that have curtailed production and increased costs.<button class=\"comment__caller comment__caller--no-comment\" aria-expanded=\"false\" aria-label=\"Paragraph comment\" aria-controls=\"login_register\" aria-haspopup=\"true\"><\/button><\/p>\n<p data-line-id=\"eaa64a91c286419fbd8a20a468e9259b\">This should come as no surprise. The COVID-19 pandemic forced many sectors to lock down, disrupted global supply chains, and produced an apparently persistent reduction in labor supply, especially in the United States. Then came\u00a0<a class=\"link link__internal\" href=\"https:\/\/www.project-syndicate.org\/onpoint\/russias-war-and-the-global-economy-by-nouriel-roubini-2022-02\" aria-controls=\"article-link-6218b8226d3eca1e81f5b243\" aria-expanded=\"false\" aria-haspopup=\"true\">Russia\u2019s invasion<\/a>\u00a0of Ukraine, which has driven up the price of energy, industrial metals, food, and fertilizers. And now, China has ordered\u00a0<a class=\"link link__internal\" href=\"https:\/\/www.project-syndicate.org\/commentary\/what-shanghai-lockdown-tells-us-about-china-future-by-nancy-qian-1-2022-04\" aria-controls=\"article-link-6262b0bd003fcc2db024aeee\" aria-expanded=\"false\" aria-haspopup=\"true\">draconian COVID-19 lockdowns<\/a>\u00a0in major economic hubs such as Shanghai, causing additional supply-chain disruptions and transport bottlenecks.<button class=\"comment__caller comment__caller--no-comment\" aria-expanded=\"false\" aria-label=\"Paragraph comment\" aria-controls=\"login_register\" aria-haspopup=\"true\"><\/button><\/p>\n<p data-line-id=\"de2712bfc13840ffac80f392f607b7eb\">But even without these important short-term factors, the medium-term outlook would be darkening. There are many reasons to worry that today\u2019s\u00a0<a class=\"link link__internal\" href=\"https:\/\/www.project-syndicate.org\/commentary\/stagflationary-environment-putins-war-no-optimal-policy-response-by-nouriel-roubini-and-brunello-rosa-2022-03\" aria-controls=\"article-link-62444004074567593838a9f2\" aria-expanded=\"false\" aria-haspopup=\"true\">stagflationary conditions<\/a>\u00a0will continue to characterize the global economy, producing higher inflation, lower growth, and possibly recessions in many economies.<button class=\"comment__caller comment__caller--no-comment\" aria-expanded=\"false\" aria-label=\"Paragraph comment\" aria-controls=\"login_register\" aria-haspopup=\"true\"><\/button><\/p>\n<p data-line-id=\"42cbbbf86ebe4ef79a8d89a2c6dcc9a0\">For starters, since the global financial crisis, there has been a\u00a0<a href=\"https:\/\/www.piie.com\/research\/piie-charts\/globalization-retreat-first-time-second-world-war\" target=\"_blank\" rel=\"noopener\">retreat from globalization<\/a>\u00a0and a return to various forms of protectionism. This reflects geopolitical factors and domestic political motivations in countries where large cohorts of the population feel \u201c<a href=\"https:\/\/www.pewresearch.org\/global\/2020\/10\/05\/in-u-s-and-uk-globalization-leaves-some-feeling-left-behind-or-swept-up\/\" target=\"_blank\" rel=\"noopener\">left behind<\/a>.\u201d Rising geopolitical tensions and the supply-chain trauma left by the pandemic are likely to lead to more\u00a0<a href=\"https:\/\/www.nytimes.com\/2022\/01\/05\/business\/economy\/supply-chain-reshoring-us-manufacturing.html\" target=\"_blank\" rel=\"noopener\">reshoring<\/a>\u00a0of manufacturing from China and emerging markets to advanced economies \u2013 or at least\u00a0<a href=\"https:\/\/finance.yahoo.com\/news\/nearshoring-could-be-the-answer-to-americas-logistics-problems-175720272.html#:~:text=Nearshoring%20is%20%22bringing%20things%20closer,Yahoo%20Finance%20(video%20above).\" target=\"_blank\" rel=\"noopener\">near-shoring<\/a>\u00a0(or \u201cfriend-shoring\u201d) to clusters of politically allied countries. Either way, production will be misallocated to higher-cost regions and countries.<button class=\"comment__caller comment__caller--no-comment\" aria-expanded=\"false\" aria-label=\"Paragraph comment\" aria-controls=\"login_register\" aria-haspopup=\"true\"><\/button><\/p>\n<p>\u2026click on the above link to read the rest of the article\u2026<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>STEFANI REYNOLDS\/AFP via Getty Images The Gathering Stagflationary Storm While recent shocks have made the current inflationary surge and growth slowdown more acute, they are hardly the global economy\u2019s only problems. Even without them, the medium-term outlook would be darkening, owing to a broad range of economic, political, environmental, and demographic trends. NEW YORK \u2013 [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[370,391,1917,13351,8402,3303,3237,11030],"class_list":["post-62540","post","type-post","status-publish","format-standard","hentry","category-economics","tag-globalization","tag-growth","tag-nouriel-roubini","tag-price-inflation","tag-project-syndicate","tag-stagflation","tag-supply-chains","tag-supply-shock"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/62540","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=62540"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/62540\/revisions"}],"predecessor-version":[{"id":62541,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/62540\/revisions\/62541"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=62540"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=62540"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=62540"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}