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The Putin Slump

Prospects for the world economy have worsened significantly as a result of the war in Ukraine, leaving forecasters and policymakers struggling to keep up. While all countries will feel the pain, rising food and energy prices mean that poorer economies are likely to suffer the most.

In this Big Picture, Harvard University’s Kenneth Rogoff warns that the risk of recession in China, the United States, and Europe is significant and increasing, and that a collapse in one region will raise the odds of collapse in the others. Likewise, Stephen S. Roach of Yale University highlights three reasons why recent downwardly revised global growth forecasts are still too optimistic.

But the bears don’t stop there. According to Mohamed A. El-Erian of Queens’ College at the University of Cambridge, the grim outlook for 2023 implies that prevailing growth models are not up to the medium-term task of pulling economies through unanticipated negative shocks.

Poorer countries are in the greatest need of assistance. Ngaire Woods of the University of Oxford’s Blavatnik School of Government urges leading economies to cooperate to prevent famine, conflict, and a major debt crisis in developing countries. And Anne O. Krueger of Johns Hopkins University argues that a well-functioning international mechanism for sovereign debt restructuring should be at the top of the global agenda.

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