Back to the Valley of Death

Since the global economic crisis that originated in the United States 14 years ago, the world economy has faced regular bouts of volatility. Massive capital injections helped the US economy recover from the initial shock in 2008, but also pushed other economies with structural problems, including some in Europe, into sovereign debt crises.

Meanwhile, China unleashed massive stimulus of its own to fight the impact of the US-inflicted crisis, only to face its own problems including the rise of shadow banking and a stock market bubble that eventually burst, causing a hard landing in 2016.

Nevertheless, the global economy recovered somewhat in 2017-18, with global synchronised growth from strong demand for manufactured goods, before it started to wobble again. A series of US…