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The World Economy: The Perfect Storm

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  • Pavel Aleksandrovich Minakir

    (Economic Research Institute FEB RAS)

Abstract

The article shows that economic sanctions that have been tested for a long period of time as an instrument to demonstrate the dominance of the dollar-centered world economic system, with the beginning of the Ukrainian crisis finally took shape as a new regulatory institution of global political and economic rules. The reasons led to negative shocks in global economic and financial system have been analyzed. It is demonstrated that underestimation of influence on short-term and long-term conditions of global equilibrium of the isolation of a large national economy (Russia), which has an oligopoly in a number of world commodity markets, causes a chain reaction of distortion of commodity stocks balance and fragmentation of the world commodity market itself. It is suggested that an abstract concern over defragmentation of the seemingly unshakable global monetary financial architecture started generating not yet very clear, but getting increasingly more specific and spatially diverse block frameworks, leading in the medium term to regionalization of global monetary financial system as far as settlement of payments and debt financial market are concerned, and to reformatting of the entire system of global finance and money, including the function of measure of value, in the long term. The article discusses the impact of the forced restrictions in global rules and guarantees for functioning of global market and global money as the institution to serve it, blocked access to this system for individual national economies on short-term and long-term modifications of conditions and mechanisms of performance of global economic financial system

Suggested Citation

  • Pavel Aleksandrovich Minakir, 2022. "The World Economy: The Perfect Storm," Spatial Economics=Prostranstvennaya Ekonomika, Economic Research Institute, Far Eastern Branch, Russian Academy of Sciences (Khabarovsk, Russia), issue 2, pages 7-37.
    • Handle: RePEc:far:spaeco:y:2022:i:2:p:7-37
    DOI: https://dx.doi.org/10.14530/se.2022.2.007-037
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    1. Pavel Aleksandrovich Minakir & Dmitriy Aleksandrovich Izotov, 2022. "World Money in Time and Space: A Blow to the Dollar or a Blow by the Dollar?," Spatial Economics=Prostranstvennaya Ekonomika, Economic Research Institute, Far Eastern Branch, Russian Academy of Sciences (Khabarovsk, Russia), issue 1, pages 7-33.
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      More about this item

      Keywords

      global financial system; economic sanctions; recession; equilibrium; USA; Russia;
      All these keywords.

      JEL classification:

      • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
      • F51 - International Economics - - International Relations, National Security, and International Political Economy - - - International Conflicts; Negotiations; Sanctions
      • F63 - International Economics - - Economic Impacts of Globalization - - - Economic Development

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