Weighing the Risks of Inflation, Recession, and Stagflation in the U.S. Economy

Compounding the damage from the COVID-19 pandemic, the Russian invasion of Ukraine has magnified the slowdown in the global economy

Last year, when demand overshot and supply chains sputtered, many firms discovered pricing power they never experienced before

This raises the risk of stagflation, with potentially harmful consequences for middle- and low-income economies alike

Global growth is expected to slump from 5.7 percent in 2021 to 2.9 percent in 2022— significantly lower than 4.1 percent

It is expected to hover around that pace over 2023-24, as the war in Ukraine disrupts activity, investment, and trade

As a result of the damage from the pandemic and the war, the level of per capita income in developing economies this year will be nearly 5 percent

The recovery from the stagflation of the 1970s required steep increases in interest rates in major advanced economies