NEW YORK – There are three negative supply shocks that could trigger a global recession by 2020. All of them reflect political factors affecting international relations, two involve China, and the United States is at the center of each. Moreover, none of them is amenable to the traditional tools of countercyclical macroeconomic policy.
PARIS – In the late 1970s and early 1980s, prominent international relations experts such as the late French political philosopher Pierre Hassner argued that the world was witnessing a process of competitive decay between the United States and the Soviet Union. For the latter, the conflict in Afghanistan was about to become an even costlier failure than the Vietnam war had been for America. By 1989, the verdict was clear: The Soviet Union had atrophied much faster than the US, and its empire collapsed, the victim of its own errors and contradictions.