Respond to two peers post.
Prompt: Will there be a global economic crisis in a world of significant uncertainty? Please review the article from Goldman Sachs, Landing the Plane. Where are we headed the next few years of uncertainty and risks? What are the five greatest current global economic challenges? How will they affect the US economy? Include a minimum of one reference.
Peer 1: I found this week’s article very interesting since it was written pre-pandemic. The article discusses the expected growth in 2019 and the next few years across the globe. There was talk of an increasing risk of recession in coming years, but it was not forecasted for 2019 or 2020, in fact there was expected overall growth. There was mention of the unemployment trends and how they had fallen in a lot of developed market countries, and that the rates should become stable to limit recession risks.
Flash forward to 2020 and the beginning of the worldwide pandemic known as COVID-19. The estimate of global growth in 2020 was downgraded to be below -3%(Jackson, 2021) The effects of the pandemic are still continuing even as the lockdowns and shut downs have eased throughout the world. The five challenges faced by developed countries are supply chain issues, labor challenges, rising costs, fiscal policies, and global trading policies.
Small businesses were often shut down due to the inability to sustain the rising supply cost challenges and the lack of available workers. This affected the GDP not just in the US, but globally. As countries began to “open” again there were challenges in finding workers to fill vacant or new postions, which affected the availability of supplies, the ability to transport supplies, and that in turn caused prices to rise for everything from food, gas, oil, to building supplies and vehicles and housing. The rising costs are
in turn affecting people and their way of life, with poverty increasing as lower income families are unable to meet the higher prices for supplies.
Global trading has been affected by the pandemic as well as the war in Russia and Ukraine and the prices for everything continue to rise, which will in turn eventually cause wages to increase, which will then impact pricing and the cycle will continue until things change and things level out or another recession takes place.
Jackson, J. K. (2021). Global economic effects of COVID-19. Congressional Research Service,Retrieved March 28, 2022, from https://scholar.google.com/scholar?as_ylo=2018&q=five+greatest+current+global+economic+challenges&hl=en&as_sdt=0,44
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