Inflationary Vulnerability of The Modern World Economy

Abstract

In recent years, the world economy has faced inflation that is unusual in its nature, specificity and consequences. The development of the world economy was affected by a number of specific but powerful shocks associated with the pandemic crisis and its consequences, but then the situation became more complicated due to the intensifi cation of military-political confl icts, which signifi cantly aff ected the previously established system of international economic cooperation. These phenomena have weakened or made uncertain the reliable tools of macroeconomic policy (monetary, fiscal) for targeting inflation and overcoming price volatility in the world markets of energy and food raw materials. Despite the fact that inflation growth has slowed down, the outlook for inflation expectations remains highly uncertain. The article discusses new determinants of infl ation growth in the context of the current crisis, in particular, speculation in energy markets, the dynamics of corporate profits, as well as the dispersion and differentiation of inflation in the eurozone countries. The possibilities of global economic growth are assessed taking into account current inflationary pressure, the main vulnerabilities of different groups of countries and the risks of a global recession are shown. To assess the scale and nature of inflation, this study draws parallels with the global crisis of 2008–2009. The prospects for the dynamics of slowing inflation as the growth rate of the global economy decreases are considered.