Global stagflationary pressures: Macroeconomic repercussions of pandemic and geopolitical crises

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. The aim of this paper is to primarily analyse the stagflation shocks of the 70s, afterwards, compare them with the current crisis for the period January 2020 - July 2022 using the example of selected developed economies (USA, Germany and France). Using descriptive analysis, it was shown 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 that were not present simultaneously. Namely, during the pandemic crisis, recessionary pressures were present, since then the GDP growth decreased till first quarter of 2021 in analysed economies, while inflation rates were stable. On the other hand, with the recovery of economies in the second quarter of 2021, inflationary pressures became stronger and intensified by geo-political crisis. Therefore, it seems that the most visible anomaly of the global economic system in 2022 is the presence of inflationary pressures.