Open AccessEight New Challenges Faced by Global Economy
Author(s) -
Yuyan Zhang
Publication year - 2021
Publication title -
east asian affairs
Language(s) - English
Resource type - Journals
eISSN - 2737-5587
pISSN - 2737-5579
DOI - 10.1142/s2737557921500078
Subject(s) - economics , currency , monetary policy , world economy , recession , liberian dollar , volatility (finance) , monetary economics , restructuring , asset (computer security) , global recession , commodity , inflation (cosmology) , order (exchange) , international economics , macroeconomics , market economy , financial economics , finance , physics , computer security , theoretical physics , political science , law , computer science
Due to COVID-19, the world has experienced the most severe economic recession since the Second World War. Some "unconventional" monetary policies have been enforced in order to stimulate the economy, and their effectiveness is positively regarded by the IMF. However, this paper identifies two negative effects of these measures. Firstly, they exacerbate policy instability; secondly, they will be detrimental to the fundamentals of monetary policies in the long term. In addition, the world economy is also confronted with many challenges, including global inflation expectations, the trends of dollar as a currency, restructuring of global supply chain, volatility of asset prices and commodity prices, and global and regional governance.