Big technological shifts are nothing new. But instead of taking centuries or decades to spread around the world, as did the printing press and telegraph, new technologies become routine in a matter of years. Just 15 years ago, modern smartphones did not exist. Today more than half of the people on the planet carry one. Any boss who thinks their industry is immune to such wild dynamism is unlikely to last long.
The pandemic may also have ended the era of low global inflation that began in the 1990s and was ingrained by economic weakness after the financial crisis of 2007-09. Having failed to achieve a quick recovery then, governments spent nearly $11trn trying to ensure that the harm caused by the virus was transient.
They broadly succeeded, but fiscal stimulus and bunged-up supply chains have raised global inflation above 5%. The apparent potency of deficit spending will change how recessions are fought. As they raise interest rates to deal with inflation, central banks may find themselves in conflict with indebted governments. Amid a burst of innovation around cryptocoins, central-bank digital currencies and fintech, many outcomes are possible. A return to the comfortable macroeconomic orthodoxies of the 1990s is one of the least likely.
The turmoil and bewilderment of the pandemic era will last for the rest of the 2020s. The new normal is already here https://t.co/1Rvtxkiu7i
— The Economist (@TheEconomist) December 20, 2021