Lessons Learned From Years of Crises

Recent years have brought a barrage of crises, from the COVID-19 pandemic and subsequent inflation to the war in Ukraine and political shifts like Donald Trump's trade policies. Yet, amidst the turmoil, economists and experts suggest valuable lessons have emerged about the global economy's nature and future.

One significant learning, according to Susanne Spector, chief economist at Danske Bank, is that the economy is more resilient than previously believed. "We have too easy a focus on what is most affected, and underestimate the economy's ability to adapt to new conditions," she noted. Spector added that few would have predicted the current economic state in early 2020, highlighting the economy's adaptive capacity.

Robert Bergqvist, senior economist at SEB, points to the excessive stimulus measures implemented by governments and central banks as a critical lesson. "The governments pressing the start button for support, while interest rates were low and the printing presses were running, it was too much," he stated, expressing hope for greater caution in handling future crises.

Bergqvist also highlighted shortcomings in analyzing the root causes of inflation post-pandemic. He explained that while demand was high, supply chains faced disruptions, fueling unprecedented inflation. "A lesson is to try to do better analyses," he urged, acknowledging the benefit of hindsight.

The increasing difficulty of forecasting is another major takeaway. Bergqvist noted that the inclusion of war as a factor, a new element in his 40-year career, complicates predictions. He described the current global landscape as a "new world order" shaped by conflicts. Furthermore, he identified Donald Trump as a "system risk," whose actions significantly impact the global system. This uncertainty is driving a shift towards reducing vulnerability and prioritizing resilience over deep integration.

Sharon Lavie, a personal economist at Lendo, added that housing is no longer a guaranteed path to wealth. "No one could believe that interest rates would rise to 5-6 percent," she said. The experience has taught people that buying property carries risks, leading to more cautious behavior in the housing market.