The Post Pandemic Global Economy - A Note On A Possible Trajectory

Abstract

The combination of the COVID-19 Pandemic and global trade tensions seem likely to make 2020 / 2021 a turning point in the global economy of the same importance as the Great Depression of the 1930’s and combined breakdown of the Bretton Woods system and Oil Crisis of the 1970’s. Post 1980 liberalization (especially in capital markets and trade flows) plus moves towards product standardization have led to rapid globalization, with multi-national corporation Foreign Direct Investment playing a key development role.

Starting with the financial crash of 2008, running through the decade of developed market austerity and into the trade tensions of recent years; the sudden shock event of the Covid-19 Pandemic has crystalised the challenging of base economic assumptions in the developed world. Developed nation consumer behaviour is shifting at an unprecedented speed, pressures are building for companies to “re-shore” activity, robotics and automation are making such re-shoring cost effective, governments are incurring unthinkable debt ratios and even the IMF is challenging the previous “Washington Consensus” liberalisation and debt reduction model.

This note develops these themes to paint the picture of a “Post Pandemic World”.

Keywords: Global Economy, COVID-19, Foreign Direct Investment, Economic Growth