Instability of the world economy

Deterioration in international economic environment
Instability of financial markets
Financial destabilization of world trade
Unregulated monetary markets
Monetary instability
International financial system instability
Fluctuations in world monetary conditions
Vulnerability of national economies

Nature

The stable expansion and balanced growth of world trade is hampered by instability of exchange rates, inadequate multilateral systems of payment, disequilibrium in balance of payments, and destructive national and international measures taken to correct maladjustments in balance of payments.

Incidence

The instability of the world economy is reflected in frequent fluctuations in global GDP growth, trade volumes, and financial markets. According to the International Monetary Fund, global GDP contracted by 3.1% in 2020, marking the sharpest downturn since the Great Depression. Volatility in currency exchange rates and commodity prices, as well as recurring financial crises, underscore the persistent vulnerability of the international economic system.
A notable example occurred during the 1997 Asian Financial Crisis, when Thailand’s currency collapsed, triggering a wave of economic turmoil across East and Southeast Asia. The crisis led to severe recessions, capital flight, and social unrest in affected countries.

Claim

The prevailing anarchy of the world's unregulated financial markets, in which turnover approaches $3 trillion per day, is a constant source of instability to the world trading system.

Counter-claim

The notion that the instability of the world economy is a pressing problem is vastly overstated. Economic fluctuations are natural and often lead to innovation and adaptation. History shows that economies rebound, and crises can spur necessary reforms. Focusing excessively on perceived instability distracts from more pressing issues like climate change and social inequality. Instead of fearing economic shifts, we should embrace them as opportunities for growth and resilience, proving that the world economy is more robust than we think.

Instability of the world economy

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SDG

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