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“My forecasts for the world economy in 2022”

Tribune. The year 2021 has put our nerves to the test, as statistics on pandemics and political vagaries blew hot and cold. The new year will be noticeably similar, especially since there will be midterm elections in the United States in November – and they will be decisive. Given this high degree of uncertainty, it seems unwise to make any strong predictions. Still, I will give my best predictions.

To begin with, the Covid-19 will finally be contained, but not eradicated. Enough people will have been vaccinated in enough parts of the world to overcome the fear that has weighed on us for two years. But ensuring that this release of energy hitherto retained allows restarting the world economy will not be so simple.

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The price system can provide reliable indications for marginal decisions – the economy needs a little more of this, a little less of that – but it is not as efficient in handling large structural transformations as the turning points from agriculture to industry, from industry to services and from peace to war (or vice versa). We’re already seeing a lot of hiccups – and there could be more – but we should be bracing for significant shifts in production and consumption patterns: more video conferencing and e-commerce, less shopping. physical in traditional retail stores. The demand for commercial real estate may decline, while the demand for housing may increase.

The job market is disrupted like never before, and some of these changes could prove to be permanent. Many workers wonder if it is worth keeping a job: why endure so much stress and such bad working conditions for such a low salary? Labor shortages in the United States persisted even after unemployment benefits expired. Workers are more demanding, and this could tip the balance of power in favor of the workforce, after four decades of increasing capital’s share of the economic pie.

Inflation and unemployment

New shortages will be reflected in prices asymmetrically, but price increases resulting from shortages tend to be disproportionate to price reductions resulting from surpluses, meaning inflation is likely. The problem is that, if we know how to control inflation when it results from excessive demand, in the current, very different context, rising interest rates will increase unemployment more than it will decrease unemployment. inflation…

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