Global Stagflation Shocks: Macroeconomic Challenges and Repercussions
Global Stagflation Shocks: Macroeconomic Challenges and Repercussions

Author(s): Jovica Pejčić
Subject(s): Social Sciences
Published by: Udruženje ekonomista i menadžera Balkana
Keywords: Stagflation; Macroeconomic repercussions; USA; Germany; France
Summary/Abstract: This paper analyses key macroeconomic repercussions of the global pandemic and geo-political crises in terms of growing recessionary and inflationary pressures, and finally, the potential occurrence of stagflation. Primarily, stagflation shocks in the 1970s are analyzed and compared to the current crisis for the period January 2020 - July 2022 in the example of selected economies (the United States, Germany and France). Descriptive analysis showed that in the observed period, inflationary and recessionary pressures existed in USA, Germany and France; however, those pressures could not be identified as stagflation, since they did not happen simultaneously. Namely, during the pandemic crisis, recessionary pressures were present, since the GDP growth decreased till the first quarter of 2021 in analyzed economies, while inflation rates were stable. On the other hand, with the recovery of economies in the second quarter of 2021 inflationary pressures were stronger, intensified by the geopolitical crisis. Therefore, it seems that the most visible anomaly of the global economic system in 2022 is the presence of inflationary pressures.

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