Are we in an economic 'doom loop'?

The global economic order is entering a "doom loop" where economic conditions, domestic politics, and international geopolitics create a self-reinforcing cycle of instability. Cornell University professor Eswar Prasad argues that forces once intended to foster prosperity—globalization, international institutions, and technology—are now driving fragmentation. Globalization has fueled a "politics of resentment" by distributing benefits unevenly, allowing populist leaders to exploit economic discontent. Meanwhile, traditional institutions like the IMF and World Bank are losing influence as the U.S. retreats from multilateralism and emerging powers like China establish rival organizations. Even technological advancements like AI and digital currencies threaten to widen wealth gaps and destabilize smaller national currencies. Escaping this trajectory requires a shift toward shared prosperity, stronger institutional frameworks, and leadership capable of prioritizing long-term global stability over short-term national interests.