This week in Say More, PS talks with Eswar Prasad, Professor of Economics at Cornell University, a senior fellow at the Brookings Institution, and the author of The Future of Money: How the Digital Revolution Is Transforming Currencies and Finance.
Project Syndicate: Last year, you warned that the pandemic recovery would be uneven, with the 2020 recession leaving “long-lasting scars on both GDP and employment” in most regions, including Europe and Latin America. How is the Ukraine war, and the Western sanctions leveled against Russia in response, likely to affect the trajectory of the global recovery?
Eswar Prasad: This year will be a tough one for global growth, not only because of the Ukraine war, but also because of the resurgence of COVID-19 in China and the limited policy space that most governments have for responding to the economic pressures they face.
The pandemic’s disruptive impact seems well contained in most parts of the world, but with new variants continuing to emerge, the coronavirus remains a wildcard. In China, however, an apparent determination to stick to an increasingly unviable zero-COVID strategy, which has recently necessitated lockdowns of major cities like Shanghai, already poses serious risks. China might have to resort to further stimulus measures to maintain decent growth.