Are we in an economic 'doom loop'?

What It Covers

Cornell economist Ishwar Prasad explains his doom loop theory: how globalization, international institutions, and technology create negative feedback cycles between economic conditions, domestic politics, and international geopolitics, driving global instability rather than prosperity as originally intended.

Key Questions Answered

• •Globalization's uneven distribution: Economic benefits concentrated among elites while leaving working classes behind, creating political openings for leaders like Trump, Bolsonaro, and Orban to exploit resentment by blaming immigrants, other countries, or minorities rather than addressing root causes of inequality.
• •Institutional fragmentation: The US withdraws from UN and multilateral organizations while China and India create parallel institutions like the Asian Infrastructure Investment Bank and New Development Bank, replacing unified global rules with competing power blocs that increase conflict risk between nations.
• •Digital currency displacement: Stablecoins backed by US dollars will directly compete with and potentially eliminate currencies from smaller countries lacking credible central banks, concentrating monetary power and destabilizing developing economies that lose control over their financial systems.
• •AI wealth concentration: Artificial intelligence generates massive returns for wealthy investors and tech companies without clear mechanisms for broad benefit distribution, intensifying economic inequality and social tensions that fuel the doom loop rather than creating shared prosperity.