Global economy November 2021-December 2022

Peter Zeihan: The end of the old world order, and what happens next (12-15 September)
Peter Zeihan argues that we are heading towards a period of deglobalisation, with ensuing chaos and disaster. In his book, The End of the World is Just the Beginning, he argues that we’re entering a new chapter where regions will have no choice but to sustain their own food, source their own energy and fight their own battles. (July 2022)

Predictions that global economy is heading for a recession are premature
Jeffrey Frankel
Despite many forecasts, a worldwide downturn in 2023 is not inevitable – and it can be avoided
The world’s leading economists spent most of 2022 convincing themselves that, if the global economy was not already in a recession, it was about to fall into one. But with the year’s end, the global slump has been postponed to 2023.
Clearly, the reports that the US was in recession during the first half of the year were premature, especially given how tight the country’s labour market is. And, despite the confidence with which many again proclaim the inevitability of a downturn, the chances of one in the coming year are well below 100%. But, owing to the rapid interest rate rises by the US Federal Reserve and other big central banks, there is something like a 50% chance of a recession in 2023 and a 75% chance of it happening at some point during the next two years.
Europe, hit hard by soaring energy prices, is more likely to head into a recession, which conventional wisdom defines as two consecutive quarters of GDP decline. China, however, seems in even worse shape. It has the same problems as Europe, plus a collapsing property sector and soaring Covid-19 cases, owing to the Chinese government’s recent decision to reopen the economy without a sufficient vaccination push.

10 November
Dani Rodrik: Don’t Let Geopolitics Kill the World Economy
When advocating their interests in a globalized world, great powers should calibrate their trade and technology polices carefully, eschewing measures that are designed for the express purpose of weakening their competitors’ development prospects. With its latest moves against China, America has failed this test.

Banking crisis breakthroughs win Nobel economics prize for Bernanke, Diamond, Dybvig
(Reuters) – A trio of U.S. economists including former Federal Reserve Chair Ben Bernanke won this year’s Nobel Economics Prize on Monday for laying the foundation of how world powers now tackle global crises like the recent pandemic or the Great Recession of 2008.
The trio, who also include Douglas Diamond and Philip Dybvig, won for their research on how regulating banks and propping up failing lenders with public cash can stave off an even deeper economic crisis, such as the Great Depression of the 1930s.
“The actions taken by central banks and financial regulators around the world in confronting two recent major crises – the Great Recession and the economic downturn that was generated by the COVID-19 pandemic – were in large part motivated by the laureates’ research,” the Swedish Academy said in announcing this year’s prize winners.

4 November
Nouriel Roubini: The Age of Megathreats
For four decades after World War II, climate change and job-displacing artificial intelligence were not on anyone’s mind, and terms like “deglobalization” and “trade war” had no purchase. But now we are entering a new era that will more closely resemble the tumultuous and dark decades between 1914 and 1945.

Severe megathreats are imperiling our future – not just our jobs, incomes, wealth, and the global economy, but also the relative peace, prosperity, and progress achieved over the past 75 years. Many of these threats were not even on our radar during the prosperous post-World War II era. I grew up in the Middle East and Europe from the late 1950s to the early 1980s, and I never worried about climate change potentially destroying the planet. Most of us had barely even heard of the problem, and greenhouse-gas emissions were still relatively low, compared to where they would soon be.
… geopolitical conflicts and national-security concerns are fueling trade, financial, and technology wars, and accelerating the deglobalization process. The return of protectionism and the Sino-American decoupling will leave the global economy, supply chains, and markets more balkanized and fragmented. The buzzwords “friend-shoring” and “secure and fair trade” have replaced “offshoring” and “free trade.”
… over time, economic malaise will deepen, inequality will rise even further, and more white- and blue-collar workers will be left behind.
The macroeconomic situation is no better. For the first time since the 1970s, we are facing high inflation and the prospect of a recession – stagflation. The increased inflation in advanced economies wasn’t “transitory.” It is persistent, driven by a combination of bad policies – excessively loose monetary, fiscal, and credit policies that were kept in place for too long – and bad luck. No one could have anticipated how much the initial COVID-19 shock would curtail the supply of goods and labor and create bottlenecks in global supply chains. The same goes for Russia’s brutal invasion of Ukraine, which caused a sharp spike in energy, food, fertilizers, industrial metals, and other commodities. Meanwhile, China has continued its “zero-COVID” policy, which is creating additional supply bottlenecks. While both demand and supply factors were in the mix, it is now widely recognized that the supply factors have played an increasingly decisive role. This matters for the economic outlook, because supply-driven inflation is stagflationary and thus increases the risk that monetary-policy tightening will produce a hard landing (increased unemployment and potentially a recession).
… The balkanization of the global economy is deeply stagflationary, and it is coinciding with demographic aging, not just in developed countries but also in large emerging economies such as China. Because young people tend to produce and save more, whereas older people spend down their savings and require many more expensive services in health care and other sectors, this trend, too, will lead to higher prices and slower growth.

10-14 October
UK joins calls for World Bank reform to focus funding on climate crisis
Alok Sharma’s intervention puts pressure on Trump-appointed Bank chief who faces calls to resign
The UK has joined calls for sweeping reforms to the World Bank, to focus much-needed funding on the climate crisis, saying that its current structures are not working.
The intervention from Alok Sharma, the current president of the UN climate talks, heaps further pressure on beleaguered World Bank chief, David Malpass. He has faced calls to resign over an apparently climate-dismissing stance, and the Bank’s perceived failures to deliver climate finance.
Germany led calls earlier in the week for fundamental reform, and the US treasury secretary, Janet Yellen, spoke out on Thursday. These public calls for an overhaul mark a significant intervention from governments, which usually keep disagreements with the Bank behind closed doors.

Joint IMF-RFAs Press Release on the 7th High-level RFA Dialogue
The seventh High-level Regional Financing Arrangements (RFAs) Dialogue was held on 12 October 2022 in Washington DC amidst a highly uncertain global outlook and slowing growth. The discussion focused on ways to strengthen cooperation in the face of the multiple shocks that are testing the resilience of the world economy, and how to contribute to a stronger Global Financial Safety Net (GFSN).
Strained emerging economies in focus at the IMF World Bank meeting
(Reuters) – The annual IMF/World Bank meetings in Washington D.C. from Monday to Saturday will include talks on a number of emerging markets squeezed by rising inflation and borrowing costs against a backdrop of slowing global growth.
The economic hit from Russia’s invasion of Ukraine has added to pressures that surfaced during the COVID-19 pandemic and has led many smaller developing economies to turn to the International Monetary Fund in recent months for help.
The IMF has approved programmes or financing facilities for 10 countries since the start of the Ukraine war on Feb. 24 worth a combined $77 billion, London-based Tellimer estimates.
This excludes emergency financing under the rapid credit facility (RCF) and rapid financing instrument (RFI) facilities, which countries such as Ukraine and Tonga have tapped. The fund also reached staff-level agreements on new facilities for four other countries.
Lawrence H. Summers: A New Chance for the World Bank
The World Bank should be a major vehicle for crisis response, post-conflict reconstruction, and, most importantly, for supporting the huge investments necessary for sustainable and healthy global development. To realize this potential, those attending the Bank’s meeting this week need to step up and do the right thing.
Outside of the security domain, overhauling the World Bank offers US President Joe Biden’s administration its greatest opportunity for a key foreign-policy achievement. The World Bank should be a major vehicle for crisis response, post-conflict reconstruction, and, most importantly, for supporting the huge investments necessary for sustainable and healthy global development. But currently it is not.

7 October
The Global Recovery Winds Down
Eswar Prasad
(Project Syndicate) Misguided policies in China and Europe have compounded the effects of supply-chain disruptions and the war in Ukraine, thus putting an end to the global recovery from the COVID-19 pandemic. With little room for maneuver, policymakers must coordinate fiscal and monetary actions to tame inflation and improve long-term growth.
The post-COVID recovery has run out of steam. The latest update to the Brookings-Financial Times Tracking Indexes for the Global Economic Recovery (TIGER) shows that growth momentum, as well as financial market and confidence indicators, have deteriorated markedly around the world in recent months. And as the global economy stalls amid heightened uncertainty and rising risks, many countries are either in or on the brink of outright recession.
Some wounds have been self-inflicted. Misguided policies like China’s zero-COVID strategy and the United Kingdom’s reckless “mini-budget” have made it harder for policymakers to respond to ongoing supply-chain disruptions and the protracted war in Ukraine. High and persistent inflation worldwide, and the actions central banks have taken to rein it in, are also depressing economic activity, weakening household and business confidence, and roiling financial markets.

4-5 October
The 2022 IMF-World Bank Group Annual Meetings: Unity in a time of crises
John Mackedon, Global Editor for the World Bank
As we prepare for the upcoming IMF-World Bank Group Annual meetings, the impacts of the ongoing economic crisis continue to bear down on nearly all facets of the global economy – pushing more people into poverty and impacting lives and incomes around the world. The pandemic has forced roughly 70 million more people into extreme poverty and global median incomes declined for the first time since measurements began in 1990.
Further complicating these global development challenges are the effects of the high food, fuel, and fertilizer prices rippling through the supply chains of an interconnected world, creating global disruptions and battering incomes and livelihoods – especially among the poorest and most vulnerable populations around the globe.
It is amid these many overlapping crises that we approach the Annual Meetings. If the previous Spring Meetings worked to strengthen the case for global collective action and showcase the role international development agencies like the World Bank Group and the IMF can play to overcome ongoing global challenges, this year’s Annual Meetings will serve as lodestar for how to not just address the overlapping crises development is facing today – but create the conditions necessary to avoid their recurrence going forward.
Three priorities for the IMF to fix the global economic crunch
By Hung Tran
(Atlantic Council) On the eve of next week’s annual meetings of the International Monetary Fund (IMF) and the World Bank, the world is being confronted with a perfect storm of deepening stagflation with very high risks of a global recession and financial crises.
The COVID-19 pandemic and Russia’s war against Ukraine have caused significant economic disruptions, including shortages and rising prices for energy, fertilizer, and grains. But poorly timed policies and a lack of coordination among major countries have exacerbated these problems, pushing the global economy to the precipice.
The following should be the [International Monetary and Financial Committee] (IMFC)’s three key priorities during next week’s meetings:
Promote coordination and stabilize exchange-rate movements
Help developing and low-income countries
Promote a sovereign-debt restructuring framework

29 September
Islamic finance provides an alternative to debt-based systems
Daromir Rudnyckyj, Professor, Anthropology, University of Victoria
I am continuing my research on Islamic finance at the Counter Currency Laboratory at the University of Victoria, where we study emerging debates on the future of money.
(The Conversation) For years, Muslims in North America have struggled to find ways to purchase homes while complying with Islamic law, or shariah. The Qur’an prohibits both the collection and payment of interest. For more than a million Canadians, these religious structures limited access to conventional mortgages.
Recently, however, companies such as the Canadian Halal Financial Corporation have emerged to fill this void. The creation of a vehicle in North America to enable Muslims to finance home ownership is part of an emerging global movement in finance.
The Central Bank of Malaysia has engineered a comprehensive Islamic financial system consisting of a network of banking institutions. They have also fostered an Islamic money market, Islamic capital markets and an Islamic insurance, or takaful, system.
Two distinct techniques have been developed to avoid the payment of interest. One interlocutor described these options as either “shariah-compliant” or “shariah-based.”
… Those seeking to reform Islamic finance favoured shariah-based contracts. They viewed them as a more authentic alternative to the shariah-compliant contracts.
Questions regarding the legitimacy of shariah-based and shariah-compliant contracts illustrate the vibrant debates that lie at the heart of Islamic finance. Which option Muslim consumers ultimately choose will determine the extent to which Islamic finance becomes an alternative to the debt-based system that prevails in most of the world today.

26 September
European Political Turmoil Roils Global Markets
Stocks and bonds in Europe and Asia fell on Monday, as did futures in American markets, as developments in Britain and Italy weighed on investors.

25 September
Head of World Bank under pressure after White House condemns his ‘climate denial’ comments
David Malpass apologises after saying he ‘doesn’t know’ if he accepts climate science
David Malpass, president of the World Bank, faces an uncertain future this week, after the White House joined a chorus of influential figures in condemning his apparent climate denialism.
Malpass remains in post for now but under severe pressure, despite issuing an apology and trying to explain his refusal last week to publicly acknowledge the human role in the climate crisis.

23 September
Mia Mottley builds global coalition to make financial system fit for climate action
In July, Barbados’ prime minister invited leaders to a retreat to discuss plans to scale-up international finance for the climate frontlines. Now, she’s asking the world for support
Barbados’ prime minister Mia Mottley is building a global coalition of nations committed to overhaul the financial system and unleash trillions of dollars of investments to the climate frontlines.
The leader of one of the world’s smallest nations is working to deliver a new global finance compact for vulnerable countries trapped between financial stress and the inability to prepare for the next climate disaster.
Addressing the UN general assembly on Thursday, Mottley laid out a plan to transform the global finance architecture and make it fit to address the climate crisis. … At the end of July, Mottley hosted a retreat in Barbados’s capital Bridgetown to brainstorm solutions and test her ideas. … The outcome was the ‘Bridgetown Agenda’ – a set of core messages designed to reform the World Bank and the International Monetary Fund (IMF), institutions set-up at the end of World War II and still dominated by the US and Europe.

Why the Global Economy Just Cracked Up A recession is all but certain.
By Kevin T. Dugan
(New York) What separates today’s market shock from the past two and a half years of the pandemic economy boils down to credit. Since March 2020, the U.S. has been awash in some $5 trillion in money sent directly to people’s pockets in the form of payments, part of a global program to keep the world from imploding as people were forced to stay home. But there has been another form of monetary support propping up the global markets: rock-bottom interest rates. This allowed people and companies to borrow even more money with corporations borrowing another $2.5 trillion in 2020 and $2.3 trillion the following year — with more of that money going to companies that are at risk of defaulting. And now more and more companies are turning their pockets inside out and saying they are unable to pay the money back.

15 September
Dani Rodrik: Governance for a Healthy Economy
Addressing the world’s biggest challenges will require a completely new policy-making paradigm, one that looks past all the old arguments about the supposed inherent limits of government and the dichotomy between the public and private sectors.
(Project Syndicate) Our world is undergoing an economic transition that will require effective government action on many fronts to manage climate change, ensure public health, and rebuild our middle classes through good jobs and innovation. But are our governments up to it?

7 September
Maurice Obstfeld and Haonan Zhou: The global dollar cycle
A rising dollar—driven by the Federal Reserve’s inflation-quelling interest rate increases and investors’ diminished risk appetite—could cause downturns in many emerging market and developing economies (EMDEs), suggests a paper discussed at the Brookings Papers on Economic Activity (BPEA) conference on September 9.
The paper—The Global Dollar Cycle—uses a statistical model tracking variables across 26 EMDEs to document how dollar-appreciation shocks lead to economic downturns, a feature of the world economy since the early 1970s when the Bretton Woods system of fixed exchange rates fell apart. And their findings point to policies that countries can put in place to mitigate the adverse effects of a stronger dollar.
Increases in public- and business-sector debts during the COVID-19 pandemic have left EMDEs particularly vulnerable to dollar appreciation now, the authors write. Most borrow substantially in dollars; thus, a stronger dollar increases the burden of their debts in terms of the output of their domestic economies. That, in combination with higher interest rates and slower economic growth (which erodes government tax receipts and business profits), makes it more difficult for EMDEs pay their debts.

29 August
China’s dim prospects turn disastrous
Russia’s terrible war generates headlines, but China’s growing debt crisis is mostly ignored. And yet, it will have profound negative effects on the global economy.
By Diane Francis
(The Hill) In just three generations, Beijing built a middle class bigger than America’s entire population. But now Chinese many face ruination. China’s domestic real estate bubble, due to deregulation, is so gargantuan that much of its middle class has been damaged.
“China’s debt bomb looks ready to explode and many warning signs suggest that a debt reckoning is imminent,” warns Nikkei Asia.
A massive mortgage revolt is underway, and as banks fail, protests grow. Today, 50 million empty or unfinished units bought on “spec” in hundreds of urban areas may never be completed or paid for, equivalent to one-third of all housing units in the United States.
Besides that, Beijing itself is owed $1 trillion by struggling governments around the world that cannot afford to pay back loans for Belt and Road Initiative projects.
China’s immediate past has been truly impressive. It has lifted itself out of abject poverty. But given Xi’s economic mismanagement, combined with his loyalty to Putin, who is the sworn enemy of all his Western customers, China’s future looks not only dim but potentially disastrous.

4 August
Is the Sri Lankan Debt Crisis a Harbinger?
Why U.S.-Chinese Tensions Put Developing Countries at Risk
By Shantayanan Devarajan and Homi Kharas
(Foreign Affairs) Sri Lankans have clearly laid the blame for their country’s economic woes at the Rajapaksa government’s feet. But Sri Lanka is not the only developing country at risk of tipping into a debt crisis. The question now is whether Sri Lanka’s implosion will prove an isolated event, the result of uniquely poor economic management, or a harbinger of a regional or even global debt crisis. Previous defaults have come in waves, sweeping through Latin America in the 1980s and East Asia in the 1990s. A similar string of defaults could hit highly indebted developing countries across the world as they cope with the lingering effects of COVID-19, Russia’s war in Ukraine, and rising interest rates in the developed world.
The good news is that international financial institutions such as the World Bank and the International Monetary Fund (IMF) have become more proactive about preventing, rather than reacting to, debt crises.
Financial crises and debt defaults often hit developing countries in waves. After Mexico announced in 1982 that it could no longer service its foreign debt, many other countries followed suit. Twenty-seven developing countries, 16 of them in Latin America, ultimately restructured their debts in the wake of Mexico’s default. After Thailand devalued its currency in 1997, foreign investors raced to pull their money out of many East Asian countries, causing financial crises in the Philippines, Indonesia, Malaysia, and South Korea. The ripple effects of the 1997 Asian financial crisis were felt as far away as Russia and Brazil.
So it is little surprise that investors and analysts are asking whether Sri Lanka’s default will be a one-off event or the first of many crises to hit developing countries this year.

20-26 July
Global economy to slow down further, IMF says
‘Tighter monetary policy will inevitably have real economic costs, but delay will only exacerbate them,’ the fund wrote.
World Economic Outlook
Gloomy and More Uncertain – The risks to the outlook are overwhelmingly tilted to the downside
(IMF) A tentative recovery in 2021 has been followed by increasingly gloomy developments in 2022 as risks began to materialize. Global output contracted in the second quarter of this year, owing to downturns in China and Russia, while US consumer spending undershot expectations. Several shocks have hit a world economy already weakened by the pandemic: higher-than-expected inflation worldwide––especially in the United States and major European economies––triggering tighter financial conditions; a worse-than-anticipated slowdown in China, reflecting COVID- 19 outbreaks and lockdowns; and further negative spillovers from the war in Ukraine.
The world isn’t ready for the looming emerging-market debt crisis
By Vasuki Shastry and Jeremy Mark
A perfect storm of economic forces threatens to swamp developing countries with inflation, rising interest rates, and unsustainable debt.
(Atlantic Council) The portents of disaster were on display during the recent turmoil in Sri Lanka, where epic government mismanagement sent the country into a thirty-five-billion-dollar debt default amid severe food-and-fuel shortages. While Sri Lanka waits for China, Japan, and commercial lenders—which together represent two-thirds of the country’s debt—to restructure its loans, markets worry that other low- and middle-income countries soon won’t be able to meet their obligations either.
The human cost is becoming all too clear: The rapid rise of food and fuel prices, along with those of other key commodities, is taking a toll upon the most world’s most vulnerable, as several United Nations agencies have highlighted in recent weeks. Hunger is growing and millions are at risk of falling into extreme poverty.
Worse still, the international community doesn’t seem prepared to do much about it.
The 53 fragile emerging economies
The contours of a debt crisis are starting to emerge
(The Economist) The scenes in Sri Lanka may be a sign of things to come elsewhere. Debt loads across poorer countries stand at the highest levels in decades. Squeezed by the high cost of food and energy, a slowing global economy and a sharp increase in interest rates around the world, emerging economies are entering an era of intense macroeconomic pain. Some countries face years of difficult budget choices and weak growth. Others may sink into economic and political crisis
Sri Lanka crisis is a warning to other Asian nations
(BBC) “Countries with high debt levels and limited policy space will face additional strains. Look no further than Sri Lanka as a warning sign,” said IMF Managing Director Kristalina Georgieva on Saturday.
She said developing nations had also been experiencing sustained capital outflows for four months in a row, putting their dreams of catching up with advanced economies at risk.
the same global headwinds – rising inflation and interest rate hikes, depreciating currencies, high levels of debt and dwindling foreign currency reserves – also affect other economies in the region.
China has been a dominant lender to several of these developing nations and therefore could control their destinies in crucial ways. But it’s largely unclear what Beijing’s lending conditions have been, or how it may restructure the debt.
Where China is at fault, according to Alan Keenan from International Crisis Group, is in encouraging and supporting expensive infrastructure projects that have not produced major economic returns.

16 July
G20 finance chiefs make few policy breakthroughs at Indonesia meeting
(Reuters) – The Group of 20 major economies’ finance chiefs on Saturday pledged to address global food insecurity and rising debt, but made few policy breakthroughs amid divisions over Russia’s war in Ukraine at a two-day meeting in Indonesia.
With questions growing about the effectiveness of the G20 in tackling the world’s major problems, U.S. Treasury Secretary Janet Yellen said the differences had prevented the finance ministers and central bankers from issuing a formal communique but that the group had “strong consensus” on the need to address a worsening food security crisis.

30 June
BRI and PGII as Competing Plans for Developing Countries
(Emirates Policy Center (EPC)) The conflict in Ukraine has shown that superpowers’ geopolitical rivalries are not restricted to battlefield triumphs but involve economic and political positioning by the adversaries.
These largest economic powers are creating dilemmas for countries to choose sides with the geopolitical implication for influence that this entails for the competing groups. The new competition revolves around the so-called Belt and Road Initiative (BRI) for economy and investment, which China first launched in 2013. During this week’s G-7 summit, leaders unveiled detailed plans to mobilize US$ 600 billion in funding for the developing world in a move seen as a counter to the BRI plan.
The Western equivalent of the BRI plan has been on the drawing board since last year’s G-7 meeting in England. It was called the Partnership for Global Infrastructure and Investment (PGII). The US-driven infrastructure plan was called the Build Back Better World. After faltering from a lack of progress, the project was renamed PGII and resurrected at the 2022 summit. As the Ukraine war focused Western minds on competing for economic spheres of influence with China, the PGII is now a priority for geopolitical influence.
According to the G-7, the Western PGII initiative will be geared toward tackling climate change, improving global health, achieving gender equality, and building digital infrastructure. These areas are meant to differentiate the PGII from the Chinese BRI with its narrower focus on infrastructure. However, the lines are somewhat blurred between the two initiatives.
Some more ambitious PGII initiatives include a solar-powered project in Angola, a vaccine manufacturing facility in Senegal, and a 1,609-km submarine telecommunications cable connecting Singapore to France via Egypt and the Horn of Africa. The allure here is combining as many countries as possible for expected benefits. During the G-7 2021 meeting, European Commission President Ursula von der Leyen said that the PGII project aimed to present a “positive, powerful investment impulse to the world to show our partners in the developing world that they have a choice.”

26 June
G7 unveils $600B plan to combat China’s Belt and Road.
(Politico) The world’s wealthiest democracies on Sunday announced a $600 billion global infrastructure initiative to counter China’s push to exert political and commercial influence through massive investments across emerging economies.
U.S. President Joe Biden was joined by other G7 leaders in unveiling the group’s counterstrike at a summit in the German Alps.
Biden declared that “our nation and the world stand at a genuine inflection point in our history,” and added that the choices made in developing countries today would gird them against future shocks from climate change and pandemics and prepare them for the digital age.
G7 nations are worried about global economic crisis, Scholz says
(Reuters) – All leaders of the Group of Seven rich democracies are concerned about a looming economic crisis as growth slows and inflation soars.
“All members are concerned about the crisis we are confronting – falling growth rates in some countries, rising inflation, raw materials shortages, disrupted supply changes – these aren’t small challenges,” German Chancellor Olaf Scholz said after a working session on the global economy.

25 June
Inflation sparks worldwide protests as food, fuel prices soar
As prices rise, inflation threatens to exacerbate inequalities and widen the gap between billions of people struggling to cover their costs and those who are able to keep spending.
By Aya Batrawy
(AP) Rising food costs. Soaring fuel bills. Wages that are not keeping pace. Inflation is plundering people’s wallets, sparking a wave of protests and workers’ strikes around the world.
This week alone saw protests by the political opposition in Pakistan, nurses in Zimbabwe, unionized workers in Belgium, railway workers in Britain, Indigenous people in Ecuador, hundreds of U.S. pilots and some European airline workers. Sri Lanka’s prime minister declared an economic collapse Wednesday after weeks of political turmoil.
Economists say Russia’s war in Ukraine amplified inflation by further pushing up the cost of energy and prices of fertilizer, grains and cooking oils as farmers struggle to grow and export crops in one of the world’s key agricultural regions.

8 June
OECD slashes global economic outlook on Russia-Ukraine war
The organization released its forecast as it gears up for a two-day annual meeting starting Thursday, attended by government ministers and featuring video remarks by Ukrainian President Volodymyr Zelenskyy.
(AP) — Russia’s war in Ukraine and the energy and food crises it worsened will severely drag down global economic growth and push up inflation this year, the Organization for Economic Cooperation and Development said Wednesday.
China’s “zero-COVID” policies, which have further scrambled manufacturing supply chains, also are weighing on a world economy that was just starting to rebound from the COVID-19 pandemic, the Paris-based OECD said, becoming the latest institution to slash its growth forecast and underscoring the dimming economic outlook.
The OECD, a club of largely wealthy nations, expects the global economy to expand 3% in 2022, down from the 4.5% that it predicted in December.
Inflation is forecast at nearly 9% for the OECD’s 38 member countries, which include the United States, United Kingdom and many European nations, nearly double the previous estimate.
The World Bank, the United Nations, and the International Monetary Fund have made similar downgrades to their economic forecasts recently.
World Bank dims outlook for global economy amid Russia war
The 189-country anti-poverty agency predicted Tuesday that the world economy will expand 2.9% this year. That would be down from 5.7% global growth in 2021 and from the 4.1% it had forecast for 2022 back in January.
The agency doesn’t foresee a much brighter picture in 2023 and 2024: It predicts just 3% global growth for both year

31 May
An inclusive future? Technology, new dynamics, and policy challenges
David Autor, Kaushik Basu, Zia Qureshi, and Dani Rodrik
(Brookings) In the current digital era, new technologies like artificial intelligence and automation are reshaping economies—and societies. While they hold great promise to boost economic prosperity and raise human welfare, they also highlight, and can deepen, economic and social fault lines across advanced and developing economies. Indeed, economic inequality has been rising in many countries over the period of the boom in digital technologies, stoking social discontent in those left behind, across industries, across the workforce, and across different segments of society. An increasingly unequal society can weaken trust in public institutions and undermine democratic governance. Mounting global disparities can imperil geopolitical stability. Rising inequality has emerged as an important topic of political debate and a major public policy concern.
This report, part of ongoing research under the Global Forum on Democracy and Technology, addresses questions related to technology’s implications for inequality and to the policy agenda to promote more inclusive economic growth and development from technological advances:

21-23 May
Davos updates | Urgent need in Afghanistan is saving economy and more
World faces a turning point, Ukraine’s Zelenskyy warns leaders at Davos
Zelenskyy urged countries to put more pressure on Moscow and accused them of not exhausting sanctions
Davos 2022: What to expect from the World Economic Forum’s most consequential meeting in 50 years
(EuroNews) In its 50-year history, the WEF has never been confronted with such unprecedented global issues as it now faces in 2022, as the world recovers from a global pandemic, grapples to contain the devastating impact of the climate crisis, and navigates a geopolitical storm following the invasion of Ukraine.
“Davos will be different…because of lack of global co-operation to solve these most pressing challenges,” Børge Brende, President of the WEF, said in a pre-event briefing.
The climate crisis is always one of the top talking points at the WEF and this is not set to change in 2022. In the past year alone, the world has broken several grim climate milestones: the last seven years were the hottest on record with extreme heatwaves noted across the Mediterranean and western America. Western Europe also experienced its worst-ever flooding while rainfall was recorded for the first time at a summit station.
This Year at Davos: A Referendum on Davos Itself
(NYT) Many values espoused by the World Economic Forum — globalization, liberalism, free market capitalism, representative democracy — are under attack.
Davos freezes out Putin and Russian oligarchs
(Politico) The WEF has put on ice its relationships with Russia, including strategic partnerships with conglomerates run by oligarchs. A Kremlin-backed research center in Moscow and an advisory council led by Russian President Vladimir Putin’s economic adviser have also been torpedoed. (8 March)

19 May
Russia’s war in Ukraine could lead to a global food crisis
(PBS) At the United Nations Security Council today, the U.S. accused Russia of using food as a weapon in its war against Ukraine, and, in turn, creating a global food security crisis.
Ukraine grows enough food to feed 400 million people. And Ukraine and Russia together account for one-third of the world’s wheat exports. But Russia’s invasion and its blockade of Ukrainian ports are preventing Ukraine from exporting its grain and steel, as Nick Schifrin recently witnessed in Southern Ukraine.

17 May
Poor Countries Face a Mounting Catastrophe Fueled by Inflation and Debt
By Peter S. Goodman, Ruth Maclean, Salman Masood, Elif Ince, Flávia Milhorance, Muktita Suhartono and Brenda Kiven
Peter Goodman, a global economics correspondent, wrote this article from New York. Reporting was contributed from Senegal, Pakistan, Turkey, Brazil, Indonesia and Cameroon.
(NYT) The hunger gnawing at families in war-torn countries like Yemen highlights a broader crisis confronting billions of people in the world’s less-affluent economies as the consequences of Russia’s assault on Ukraine are compounded by other challenges — the continuing pandemic, a global tightening of credit and a slowdown in China, the second-largest economy after the United States.
The most direct repercussions are seen in the rising prices of cooking fuel, fertilizer and staple foods like wheat, disrupting agriculture and threatening nutrition in much of the world.
High energy prices are at the center of diminished expectations for global economic growth, now estimated at 3.6 percent this year compared with 6.1 percent last year, according to a forecast from the International Monetary Fund.
More than 14 million people are now on the brink of starvation in the Horn of Africa, according to the International Rescue Committee — the result of a terrible drought combined with the pandemic and shortfalls of grains from Russia and Ukraine.

16 May
Don Pittis: Crypto markets tumble and investors get their fingers burned
Canadian fintech scholar who warned of meltdown says economy will feel impact
(CBC) People who put their hard-earned cash into a tumbling cryptocurrency unit that is at the heart of the latest sharp decline in digital coins may be regretting they did not read a recent paper by Canadian financial technology scholar Ryan Clements demonstrating why it was bound to fail.
Now, other financial commentators are echoing his warning that this time, the loss of more than a trillion U.S. dollars in asset value from world cryptocurrency markets will have an impact well beyond the “crypto bros” who put in their own money.

23 April
2022 IMF and World Bank Spring Meetings conclude
The 2022 Spring Meetings of the International Monetary Fund (IMF) and the World Bank will conclude today.
(Foreign Brief) The economic consortium addressed the issues of worsening global debt crisis—arising from unequal post-pandemic recovery—and worldwide economic turmoil surrounding the conflict in Ukraine.
Expect future efforts to center around debt reform and restructuring. The World Bank announced crisis packages combining international lending with the Green, Resilient and Inclusive Development approach, with implementation slated for late 2022. The IMF is likely to pursue the use of more supplementary foreign exchange reserve assets known as special drawing rights (SDRs). The Forum’s new Resilience and Sustainability Trust will seek an injection of $45 billion towards this initiative.
Short-term moderate success is likely as 98 countries have already used SDRs to alleviate debt. Separately, the Economic and Social Council (ECOSOC) will meet next week to begin developing a new debt resolution mechanism under the oversight of the UN. In the long-term, the lack of a comprehensive proposal to tackle the problem of debt reform emerging from the Spring Meetings signals continued financial hardship for many of the world’s developing economies.

22 April

ECONOMIC MESS DRIVING POLITICAL INSTABILITY ACROSS EMERGING WORLD: A “barrage of shocks is building that’s unlike anything emerging markets have had to confront since the 1990s, when a series of rolling crises sank economies and toppled governments,” per Bloomberg. “Turmoil triggered by rising food and energy prices is already gripping countries like Sri Lanka, Egypt, Tunisia and Peru,” which could rapidly enter into debt default. “It risks turning into a broader debt debacle and yet another threat to the world economy’s fragile recovery from the pandemic.”
So why isn’t this the first and only topic of IMF and World Bank spring meetings? World Bank President David Malpass directly acknowledged the risk this week. But the world is still waiting for a plan

21 April
World Bank warns of ‘human catastrophe’ food crisis
The world faces a “human catastrophe” from a food crisis arising from Russia’s invasion of Ukraine, World Bank president David Malpass has said.
He told the BBC that record rises in food prices would push hundreds of millions people into poverty and lower nutrition, if the crisis continues.
The World Bank calculates there could be a “huge” 37% jump in food prices.
This would hit the poor hardest, who will “eat less and have less money for anything else such as schooling”.
In an interview with BBC economics editor Faisal Islam, Mr Malpass, who leads the institution charged with global alleviation of poverty, said the impact on the poor made it “an unfair kind of crisis… that was true also of Covid”.

19 April
Yellen calls for IMF reform
US Treasury secretary Janet Yellen called for reforms to the International Monetary Fund, as the global institution begins its spring meetings. Yellen said on April 13 that the world needed to ensure the IMF has the “tools to fulfil its role of financial firefighter” as it faces “modern” crises that may be more severe and frequent. She said the fund had not been designed to address the “novelty and breadth” of the global financial crisis and the Covid crisis.

18 April
Summoning the Spirit of Bretton Woods
Liam Byrne
(Project Syndicate) A riptide is about to hit the global economy, and the West needs America to help. Just as longstanding NATO allies are helping Ukraine fight against its Russian invaders, we need the old Bretton Woods allies to win the peace. That will require equipping the International Monetary Fund and the World Bank with the tools they need to stabilize poorer countries ravaged by the conflict-driven spike in energy and food prices, COVID-19, and climate change.
Together with European allies, the United States created the World Bank, the IMF, and then the Marshall Plan to rebuild shattered Western economies so that they became strong enough to resist the Soviet Union. The world needs similar visionary leadership again today. After all, the economic disruption wrought by the COVID-19 pandemic pushed as many as 124 million people worldwide into extreme poverty – the first rise in global poverty this century. According to the World Bank, as many as a dozen developing economies may be unable to service their debts in the coming months.

16-17 April
April 2022 update to TIGER: Policymakers face grim quandaries as storm clouds gather
Editor’s Note: In collaboration with the Financial Times (FT), Eswar Prasad of Brookings and Aryan Khanna of Cornell have constructed a set of composite indexes that track the global economic recovery. The Tracking Indexes for the Global Economic Recovery (TIGER) is also featured in the Financial Times. A version of this article appears in Project Syndicate.
The latest update of the Brookings-Financial Times Tracking Indexes for the Global Economic Recovery (TIGER) shows an overall loss of growth momentum, with considerable unevenness across countries in their vulnerability to adverse domestic and international developments.
Eswar Prasad: Storm Clouds Over the Global Economy
Following Russia’s invasion of Ukraine and a resurgence of inflation around the world, the prospects for a robust global recovery from the COVID-19 pandemic have dimmed. Not only is the macroeconomic outlook more mixed; monetary and fiscal policymakers in major economies also will have less room for maneuver.
(Project Syndicate) This was supposed to be the year of post-COVID normalization, labor-market healing, and a revival of economic growth. Yet it is turning out to be a fraught period of geopolitical realignments, persistent supply disruptions, and financial-market volatility, all of which are playing out in a context of surging inflationary pressures and limited policymaking space.
The war in Ukraine, COVID-19’s resurgence in China, and the lack of macroeconomic policy options available to most governments will make 2022 a tough year for global growth. And although COVID-19’s disruptive effects seem contained in most parts of the world, the potential for new variants to emerge means that it will remain a wildcard. The spike in geopolitical tensions has exacerbated global supply-chain disruptions. With prices already surging and demand holding up well in most major economies until recently, conditions are ripe for an escalation of inflationary pressures around the world. Worse, most governments and central banks will find it difficult to bolster demand if it shows signs of flagging in the face of mounting economic uncertainty and financial volatility. Consumer and business confidence have already taken a hit, and that bodes ill for consumer demand and especially for business investment.

14 April
The 2022 World Bank Group Spring Meetings: Strengthening the case for globalism
John Mackedon, Global Editor for the World Bank
(World Bank blogs) While the global community continues to grapple with many of the same challenges addressed at [the October 2021] IMF/World Bank Annual meetings, a series of additional ones have also emerged. A war in Ukraine is devastating communities there – displacing millions, creating economic and social reverberations around the globe, and inserting yet more uncertainty into global markets and economic recovery plans. The ongoing COVID-19 pandemic continues to disrupt lives and livelihoods in nearly every country on earth . And a looming food crisis – underpinned by soaring wheat, fertilizers and fuel prices – threatens to drastically increase food insecurity and drive millions of additional people into poverty.
The confluence of these crises (which themselves are further exacerbated by the ongoing challenges of climate change, fragile states, forced migration, and other development challenges) puts the need for global action on a planetary scale into stark relief and highlights the fundamental role the international development community must play in simultaneously overcoming these challenges and creating the conditions necessary to ensure they do not repeat into the future.
IMF chief: Ukraine war and inflation threaten global economy
(AP) — The head of the International Monetary Fund warned Thursday that Russia’s war against Ukraine was weakening the economic prospects for most of the world’s countries and called high inflation “a clear and present danger” to the global economy.
IMF Managing Director Kristalina Georgieva said the consequences of Russia’s invasion were contributing to economic downgrades for 143 countries, although most of them should continue to grow. The war has disrupted global trade in energy and grain and is threatening to cause food shortages in Africa and Middle East.
Georgieva made her comments in a speech on the eve of next week’s spring meetings of the IMF and the World Bank in Washington.
Georgieva also warned of “the fragmentation of the world economy into geopolitical blocs,” with the West imposing far-reaching sanctions on Russia and China expressing support for the autocratic Russian regime of President Vladimir Putin.
“In a world where war in Europe creates hunger in Africa; where a pandemic can circle the globe in days and reverberate for years; where emissions anywhere mean rising sea levels almost everywhere — the threat to our collective prosperity from a breakdown in global cooperation cannot be overstated,” Georgieva said.
Before the war, Russia and Ukraine had supplied 28% of global wheat exports. And Russia and Belarus accounted for 40% of exports of the fertilizer potash.
“Now,” Georgieva said, “grain and corn prices are soaring, and leaders across Africa and the Middle East are telling me that supplies are running low. Food insecurity is a grave concern.
“We must act now with a multilateral initiative to bolster food security. The alternative is dire: More hunger, more poverty and more social unrest — especially for countries that have struggled to escape fragility and conflict for many years.”

11 April
“Inequality starts at the top”: Voting reforms in Bretton Woods Institutions
By Amin Mohseni-Cheraghlou
(Atlantic Council) The World Bank Group (WBG) and International Monetary Fund (IMF) are the most relevant norm-setters, knowledge-producers, and conveners in the international development and finance landscape. However, these Bretton Woods Institutions (BWIs) are facing criticism regarding the way they govern and operate. Chief among these criticisms is members’ unequal voice and representation in the leadership and decision-making structure in institutions which still resemble the global economy and power dynamics of 1945, when the institutions were established.
Civil society and world leaders have long called for the WBG and IMF to implement meaningful reforms reflecting today’s global political economy structure. However, reforms in BWIs have been small in scale and slow in pace. This has led to the increasing dissatisfaction of some member countries —namely China— with the leadership and voting structure in the BWIs. Particularly, the overarching influence of the United States —and by extension the U.S. Congress— through its institutional veto power is a frequent source of tension in the BWIs’ reform agenda.
Inequality at the top: Democratic challenges at Bretton Woods Institutions

21 February
What’s at Stake for the Global Economy as Conflict Looms in Ukraine
Countries that depend on the region’s rich supply of energy, wheat, nickel and other staples could feel the pain of price spikes … A Russian attack on Ukraine could contribute to far-reaching jumps in the price of food and energy..
(NYT) After getting battered by the pandemic, supply chain chokeholds and leaps in prices, the global economy is poised to be sent on yet another unpredictable course by an armed clash on Europe’s border.
Even before the Kremlin ordered Russian troops into separatist territories of Ukraine on Monday, the tension had taken a toll. The promise of punishing sanctions in return by President Biden and the potential for Russian retaliation had already pushed down stock returns and driven up gas prices.
An outright attack by Russian troops could cause dizzying spikes in energy and food prices, fuel inflation fears and spook investors, a combination that threatens investment and growth in economies around the world.
… Russia is a transcontinental behemoth with 146 million people and a huge nuclear arsenal, as well as a key supplier of the oil, gas and raw materials that keep the world’s factories running. But unlike China, which is a manufacturing powerhouse and intimately woven into intricate supply chains, Russia is a minor player in the global economy.

17 February
Announcement of the 2022 Spring Meetings of the International Monetary Fund and the World Bank Group
The 2022 Spring Meetings of the International Monetary Fund (IMF) and the World Bank Group (WBG) will take place from Monday, April 18, through Sunday, April 24.

14 February
Bloomberg: Oil’s surge toward $100 a barrel for the first time since 2014 is threatening to deal a double-blow to the world economy by further denting growth prospects and driving up inflation.
That’s a worrying combination for the U.S. Federal Reserve and fellow central banks as they seek to contain the strongest price pressures in decades without derailing recoveries from the pandemic
While energy exporters stand to benefit from the boom and oil’s influence on economies isn’t what it once was, much of the world will take a hit as companies and consumers find their bills rising and spending power squeezed by costlier food, transportation and heating.
According to Bloomberg Economics’ Shok model, a climb in crude to $100 by the end of this month from around $70 at the end of 2021 would lift inflation by about half a percentage point in the U.S. and Europe in the second half of the year.
JPMorgan Chase warns a run-up to $150 a barrel would almost stall the global expansion and send inflation spiraling to over 7%, more than three times the rate targeted by most monetary policy makers.

WORLD ECONOMIC OUTLOOK UPDATE
Rising Caseloads, A Disrupted Recovery, and Higher Inflation
The global economy enters 2022 in a weaker position than previously expected. As the new Omicron COVID-19 variant spreads, countries have reimposed mobility restrictions. Rising energy prices and supply disruptions have resulted in higher and more broad-based inflation than anticipated, notably in the United States and many emerging market and developing economies. The ongoing retrenchment of China’s real estate sector and slower-than-expected recovery of private consumption also have limited growth prospects.

30 January
Maybe the volatility of cryptocurrencies is a feature, not a bug
(WaPo) If a country is experiencing runaway inflation, bitcoin is probably a good alternative to the local currency (though note that during Venezuela’s epic bout of hyperinflation, people mostly dollarized rather than turning to crypto). Cryptocurrencies might also be a better option than jewelry for smuggling wealth out of countries with strict currency controls. And cryptocurrency is absolutely essential to anyone collecting on a ransomware attack.
Yet those uses don’t seem as though they’re worth trillions, as the cryptocurrency market is currently valued. To justify those kinds of valuations, crypto needs to at least partially replace major currencies such as the dollar, or payment systems such as Visa, or investments such as gold, or some other fairly important economic activity yet to be named.
… Markets like gambles, after all. And in particular, they like the kind of gamble that a volatile asset class like bitcoin offers. It has long been known that intermittent, variable rewards are more motivating than steady ones.

21 January
Davos Agenda: What can we expect of 2022? Highlights and key takeaways
The year 2022 started with a note of uncertainty. The Omicron COVID-19 variant was spreading the globe, the risks of climate crisis loomed nearer, economic recovery and development seemed to stall, and the gap between the rich and the poor stretched even wider.
It was facing those overlapping global issues that the participants of The Davos Agenda 2022 came together virtually at the World Economic Forum this week to discuss their visions for the year ahead and share solutions.
The state of the world in 2022 may be beset by global challenges – but it is not without hope. Through global collaboration, public-private partnerships, new models and innovations, and a renewed sense of social responsibility we can create a more sustainable, inclusive and resilient world.
Here are the main messages and takeaways from The Davos Agenda 2022.
We are seeing challenges mounting from supply chain disruptions, to tectonic shifts in labour markets, to inflation figures which are of concern to policy-makers and individuals alike. The year ahead is a crucial one to work together, rebuild trust and shape a better and more inclusive future for all.
The economy was also front and centre during discussions at Davos Agenda 2022, with world leaders commenting on the impact of the pandemic on economies and the ongoing efforts toward recovery.
The pandemic has reversed gains in poverty reduction, lowered incomes, caused a global drop in GDP and disrupted development. World leaders including Chinese President Xi Jinping, Indonesian President Joko Widodo, Australian Prime Minister Scott Morrison, Japanese Prime Minister Kishida Fumio, Nadia Calviño Santamaría, the Deputy Prime Minister and Minister for Economy and Digitalization of Spain, and others emphasized the need to focus on strong economic recovery.

14 January
Regime Change in the Global Economy
Michael Spence
After helping to drive decades of development and modernization in emerging economies, the twentieth-century economist W. Arthur Lewis’s Nobel Prize-winning growth model can now be applied to the entire world. Unfortunately, what it shows is that we are heading into a period of deep uncertainty and supply-constrained growth.
(Project Syndicate) Applied to the transitions now underway in the global economy, Lewis’s insights imply major changes in growth patterns, the structure of economies, the configuration of global supply chains, and the relative prices of pretty much everything – from goods, services, and labor to commodities and various asset classes. Equally important, they indicate that this transition will be irreversible. Navigating the global version of the Lewis turning point will be tricky. Understanding the underlying structural changes is the necessary place to start.

11 January
Global Growth to Slow through 2023, Adding to Risk of ‘Hard Landing’ in Developing Economies
(World Bank) Following a strong rebound in 2021, the global economy is entering a pronounced slowdown amid fresh threats from COVID-19 variants and a rise in inflation, debt, and income inequality that could endanger the recovery in emerging and developing economies, according to the World Bank’s latest Global Economic Prospects report.
World Bank warns global economy faces grim outlook
(BBC) The global economy faces a “grim outlook”, World Bank president David Malpass has warned, as the aftershocks of the pandemic continue to weigh on growth – especially in poor countries.
His organisation’s latest forecast predicts global growth will slow to 4.1% this year from 5.5% in 2021.
It attributed the slowdown to virus threats, government aid unwinding and an initial rebound in demand fading.
But Mr Malpass said his greatest worry was widening global inequality.
“The big drag is the inequality that’s built into the system,” he told the BBC, noting that poorer countries were especially vulnerable to economic damage from efforts to fight inflation.

2021

28 December
Happy new year? Five economic flashpoints to beware in 2022
From a new Covid variant to rampant inflation, the global economy faces some daunting risks in the new year
(The Guardian) After the turmoil of the past two years, the consensus among economic pundits is that 2022 will be calmer. But in late 2019, when the first reports of a new coronavirus started to filter out from Wuhan in China, few imagined within months that the world economy would be flattened by a pandemic. So what are the big risks for the coming year?
– A new Covid variant derails the global economy
– Inflation takes off
– China hits the buffers and turns nasty
– A crisis in emerging markets
– A financial crash

22 December
Why bitcoin is worse than a Madoff-style Ponzi scheme
A Ponzi scheme is a zero-sum enterprise. But bitcoin is a negative-sum phenomenon that you can’t even pursue a claim against, argues Robert McCauley.
(Financial Times) By contrast to investments with Madoff, Bitcoin is bought not as an income-earning asset but rather as a zero-coupon perpetual. In other words, it promises nothing as a running yield and never matures with a required terminal payment. It follows that it cannot suffer a run. The only way a holder of bitcoin can cash out is by a sale to someone else.

2 December
Daron Acemoglu: The Supply-Chain Mess
Recent bottlenecks and price surges have underscored the risks that come with sprawling global supply chains supposedly built around the principle of economic efficiency. But beyond these glaring issues, supply chains impose additional social costs that warrant policymakers’ attention
(Project Syndicate) Global supply chains used to be the last thing policymakers worried about. The topic was largely the concern of academics, who studied the possible efficiency gains and potential risks associated with this aspect of globalization. Although Japan’s Fukushima nuclear disaster in 2011 had demonstrated how supply-chain disruptions could impact the global economy, few anticipated how central the problem could become.

3 November
Michael Spence: Why Are Supply Chains Blocked?
participants in global supply chains increasingly predict that the shortages, backlogs, and imbalances between supply and demand will persist well into 2022, and perhaps longer.
(Project Syndicate) When forecasts are not specific enough to be actionable, the supply response cannot adjust in a timely or efficient manner. And because there is relatively little slack built into global supply chains, large deviations from normal patterns produce delayed responses, shortages, backlogs, and bottlenecks, like those today.
in the first quarter of this year, growth was overwhelmingly projected to accelerate, and experts were not exactly sounding the alarm that supply would fail to keep up. Yes, influential macroeconomists did warn that the combination of highly accommodative monetary policy, elevated household-savings balances, pent-up demand, and massive fiscal spending significantly increased the risk of inflation. And, yes, those forecasts – which appear increasingly prescient – implied that a surge in aggregate demand, fueled by a wall of liquidity and frothy asset prices, could outpace supply. But the likely duration of the imbalance remained unknown, and many argued that inflation – and, by extension, supply disruptions – would be “transitory.”