Economy and world power balances post pandemic/war

Abstract

The scientific literature has taken up the theme of secular stagnation of economic growth again in the middle of the second decade of the 21st century, many decades after Alvin Hansen's original contribution. The resurgence of this phenomenon is also accompanied by profound changes at other levels: the world has become more global, digitization is advancing and, in International Relations, the instruments of power change and soft power joins the military and economy components as the fundamental vertices of power. Meanwhile, a violent pandemic emerged, causing unimaginable loss of life, significant changes in habits and a deep worldwide econo mic recession. Soon after, war invaded Europe, destabilizing the Old Continent and having very negative repercussions on distribution channels and the world economy. The pandemic and the war reinforce a very negative expectation about the evolution of the world economy, in a dual scenario in which not everyone reacts in the same way. Our analysis focuses mainly on the United States and China, currently the two major economic powers. In fact, the latter will most likely become the world's largest economy in the short term, although the US, aware of the relative loss of its supremacy, continues to resist in different ways in which this top position can be played. The aim of this article is to assess to what extent all these changes in the paradigms of geoeconomics, with the rise of China to the top of the world pyramid, accompanied by a dual phenomenon, that is, an apparent long stagnation of world economic growth in the advanced economies and the maintenance of solid economic growth in emerging markets, may change the balances of world power. And this eventual change, it seems to us, will probably involve a strengthening of China's position and the loss of the still dominant power, the USA.