Global problems

The global economy faces a number of serious challenges in the 21st Century. Globalisation has benefitted most participants, but the increasing interconnectedness of the global economy has created a number of problems.

Short term problems

Some global problems are short term, such as the recent recession caused by the credit crunch and related banking crisis. Most global shocks are relatively short term and may be self-correcting. Other apparently short run events can have long lasting effects, such as the oil shocks of the 1970s, which permanently altered the global market for oil.

Longer term problems

Other global problems are longer term, and may require a strategic approach to finding solutions. These problems include global inequality and unequal economic development, global poverty, the exhaustion of non-renewable resources, depletion of the environment and global warming, and systemic problems associated with inadequate regulation of financial markets.

Footnote: The impact of Brexit

Much of the impact of Brexit is likely to be relatively short-lived, and will include both positive and negative effects. The net balance between these effects will remain unknown, at least until negotiations begin and the final post-Brexit relationship between the UK and the EU is formalised. Even then, the longer-term impact will be uncertain, as this will depend upon the type of trade deals that can be struck by the UK and the rest of the World in the future.