The Economist Magazine (November 2, 2023): The latest issue features The contradiction at the heart of the world economy – Threats abound, including higher-for-longer interest rates; Why Israel must fight on – Unless Hamas’s power is broken, peace will remain out of reach; unless Hamas’s power is broken, peace will remain out of reach; Donald Trump’s tariff plans would inflict grievous damage on America and the world – You may think his worst ideas won’t get far. Sadly, on trade he has been singularly influential…

Too good to be true: The contradiction at the heart of the world economy

The world economy is defying gravity. That cannot last. Threats abound, including higher-for-longer interest rates

Even as wars rage and the geopolitical climate darkens, the world economy has been an irrepressible source of cheer. Only a year ago everyone agreed that high interest rates would soon bring about a recession. Now even the optimists have been confounded. America’s economy roared in the third quarter, growing at a stunning annualised pace of 4.9%. Around the world, inflation is falling, unemployment has mostly stayed low and the big central banks may have stopped their monetary tightening. China, stricken by a property crisis, looks likely to benefit from a modest stimulus. Unfortunately, however, this good cheer cannot last. The foundations for today’s growth look unstable. Peer ahead, and threats abound.