We hoped the global economy had overcome the pandemic and the crisis. Wrong, says Harvard economist Kenneth Rogoff. Because globalization, which has increased our prosperity, has made us vulnerable.
Kenneth Rogoff, an economist at Harvard University, warns in the new STERN of dark times for the world economy: “I’m afraid that the worst is still ahead of us,” says the professor. “If China slides into recession, we are heading for the worst crisis since World War II.”
Rogoff, one of the best-known economists in the world and former chief economist at the International Monetary Fund (IMF), considers the mixture of the various crises to be extremely dangerous: the consequences of the pandemic, global inflation and the Russian war against Ukraine – now, according to Rogoff, the demise of China due to the Zero Covid policy. It is doomed to failure: “Even a powerful apparatus like the Chinese state cannot compete with the new Omicron variants,” says Rogoff. “Even if the regime locks a large part of the population at home.” The world urgently needs a new growth engine, because China will no longer be that.
Kenneth Rogoff expects the end of globalization
The Harvard economist believes that through pandemic, war and supply chain problems we are witnessing the end of globalization – at least as we knew it. “The rise of China was the greatest story in the last 40 years,” says Rogoff. “The decline of globalization could be the story of the next 40 years.” He warns of instability in the world: “Revolutions and coups are multiplying in Africa. The developing countries are losing 10 or 20 years.”
For the United States, Rogoff predicts that inflation could be as high as four percent by the end of next year – and things are hardly looking any better for Europe. According to Rogoff, US President Joe Biden went too far in combating the crisis. “He gave the people way too much money to fight the crisis.” That led to high inflation. Biden certainly meant well, but it was too much. “His spending policy has deprived us of the financial leeway we now need to counteract the impending economic crash.”