The decades ahead will be shaped by a contest for natural resources, making the world more prone to stagflation and handing the levers of policy back to governments. Emerging economies that are rich in people but poor in resources will be the most acutely affected but can take practical steps to strengthen their resilience.
NEW DELHI—From the early 1980s until the COVID-19 pandemic hit in 2020, the world economy enjoyed unusually good conditions. The Cold War ended, defense budgets shrank, and hundreds of millions of workers joined the global market. Energy and metals were mostly cheap, and supply chains stretched across borders on the assumption that goods would always move freely. Inflation was on a downward trend, owing partly to central banks and partly to the strong tide of peace, globalization, and plentiful supply they were swimming in.