The End of Stability

Beginning in the early 1980s, advanced economies appeared to have discovered the formula for lasting economic stability. Financial crises were contained, markets recovered, and each setback seemed to reinforce the belief that governments and central banks could keep the economy on course.

That confidence is now being challenged. The forces that shaped the stability era are reversing. Borrowing costs have risen, inflation has returned, debt has reached historic levels, populations are ageing, and geopolitical rivalry is replacing much of the cooperation that underpinned globalization. The result is a world that is becoming less stable, more divided, more unbalanced, more volatile, and far less forgiving than the one many have come to take for granted.

A more demanding economic era has begun. The conditions that made decades of stability possible no longer exist. The years ahead will confront governments, businesses, financial markets, and households with challenges unlike those they have faced for decades. Some economies will adapt successfully. Others will struggle with weak growth, financial instability, and the prospect of severe economic disruption. This is the challenge that now confronts every advanced economy.

Drawing on decades of experience in government, international policy, financial markets, and economic research, international economist Ranga Chand explains how the stability era was built, why its foundations are beginning to fracture, and what that means for governments, businesses, investors, and households in the years ahead.

The future is not predetermined. But it will be harder than the past.