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DOI: 10.7256/2454-0668.2022.4.38565
EDN: OQNNUQ
Received:
03-08-2022
Published:
10-08-2022
Abstract:
Currently, crisis processes are observed in the world and national economies, which have a negative impact on the level of their socio-economic development. In the context of the development of crisis processes in the world economy, research aimed at solving the fundamental problem of determining their causes is relevant. The purpose of this work is to identify theoretical approaches to explaining the nature of the current crisis processes in the world economy. The object of the study is the dynamics of the development of the world economy. The subject of the study is the paradigms of crisis processes in the world economy. The methodological basis of this study is the fundamentals of system, statistical, comparative analysis and synthesis methods. As a result of the review, it was determined that two paradigms of explaining crisis processes have developed in the economic literature. The reason for the divergence of views of macroeconomists of the two paradigms is shown. An attempt is made to consider the current crisis as a result of the influence of structural and market factors. The importance of solving the problem of finding the nature of the generation of crisis processes is demonstrated by the example of the difference in the ways of their resolution depending on the cause of occurrence. It was revealed that signs of economic decline were observed in the leading national economies in the "pre-pandemic" period, and the negative economic consequences of the spread of coronavirus infection only intensified the negative dynamics of the development of national economies.
Keywords:
crises, paradigm, coronacrisis, technological structure, world economic structure, Kondratiev cycles, unemployment, development cycle, global leadership, sanctions
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Introduction Currently, the global economy is experiencing crisis processes leading to negative socio-economic consequences in both developed and developing countries, as evidenced by numerous reports and forecasts of domestic and foreign experts. Thus, according to the forecast of the International Labor Organization (ILO), the global unemployment rate in 2022 will rise to 207 million people, which is 11% higher than the "pre-pandemic" indicator of 2019.[1] In June 2022, following the World Bank, the Organization for Economic Cooperation and Development (OECD) lowered its forecast for global GDP growth in 2022 to 3%, which is one third less than the December forecast (4.5%). OECD experts point to an increase in the inflation rate, a decrease in disposable incomes and household living standards and, accordingly, a decrease in the level of consumption in the world. At the same time, the authors of the reports note that the level of household disposable income decreased year-on-year in the last quarter of 2021. [2][3] In the context of the development of crisis processes in the world economy, research aimed at developing economic recovery plans is relevant. However, in order to develop such a plan, it is necessary to solve the fundamental task of determining the causes of crisis processes. The purpose of this work is to highlight theoretical approaches to explaining the nature of the current crisis processes in the world economy. The object of the study is the dynamics of the development of the world economy. The subject of the study is the paradigms of crisis processes in the world economy. The methodological basis of this study is the fundamentals of system, statistical, comparative analysis and synthesis methods. Paradigms of crisis processes in the global economy In the economic literature, reports of international organizations, speeches of political leaders, the media, various hypotheses of the nature of the generation of the economic crisis are heard – from the consequences of the spread of coronavirus infection and problems associated with production chain breaks in the conditions of global turbulence, to the deep processes of transformation of models of national and world economies. A review of the literature indicates that two paradigms can be distinguished in economics that explain the nature of the generation of current crisis processes in the world economy. According to the first, the source of economic crises are external factors in relation to national economies – the increase in geopolitical tensions since 2014, the spread of the new COVID-19 coronavirus infection and the subsequent restrictions on the functioning of economic agents, breaks in production and logistics chains.[4] According to this concept, in order to get out of the crisis situation, it is necessary to develop a mechanism to reduce the degree of influence of the above external factors for national economies.[5] Unlike macroeconomists who adhere to the first paradigm and consider social development as a linear process consisting of manifestations of chaotic accidents, macroeconomists of the second paradigm consider social development as a wave-like process and look for fundamental patterns that allow explaining and predicting the future of social development. The founders of this approach include such domestic and foreign economists as N.D. Kondratiev, J. Schumpeter, F. Braudel, J. Arrigi, G. Mensch, I. Wallerstein, K. Peres, S.Y. Glazyev. Modern scientists who adhere to the second paradigm argue that sanctions wars, the spread of coronavirus infection and other factors analyzed by scientists of the first paradigm are only a manifestation or a "trigger mechanism" that triggered negative recession processes that have been brewing in national economies for a long time[6] [1]. Thus, S.Y. Glazyev, developing the theory of N.D. Kondratiev, points out that severe depressions and crises, including the current economic crisis, occur during the downward wave of the cycle, which is replaced by an upswing and rapid economic growth during the upward wave, which causes turbulence in the world economy and has a direct impact on geopolitical sentiments, the dynamics of foreign trade and the direction of capital flows [2, 3]. S.Y. Glazyev, during the analysis of the process of generating crises occurring during the change of technological and world economic patterns, pays special attention to the analysis of the influence of the structural factor, emphasizing the need to limit the "inflating" of the financial sector of the economy and the importance of the development of the real sector of the economy, manufacturing industry and its high-tech sector for sustainable long-term economic development [4]. In the "pandemic" year 2020, the academician actively published works in which he associated the ongoing negative processes in the world and national economies not with external factors, including the spread of coronavirus infection, but with deeper causes - the structural restructuring of the world economy, which occurs as a result of a change in technological and world economic patterns [4-5].
In the same year 2020, the domestic economist V.B. Supyan, using the example of the US economy, demonstrated the likelihood of crisis processes brewing in national economies caused by structural imbalances generated by the inefficiency of the economic model of developed countries [6]. Thus, throughout 2019, there was a slowdown in the pace of US economic growth - from 2.9% in 2018 to 2.3% in 2019. The growth rate of investments in fixed assets decreased over the year from 6.4% to 2.1%, the growth rate of personal consumer spending fell from 3.0% to 2.6%, and the number of new jobs increased by 170 thousand compared to 192 thousand a year earlier [6]. Thus, the economist draws the reader's attention to the fact that the prerequisites for the crisis in the United States manifested themselves in the "pre-pandemic" year 2019. In addition, V.B. Supyan emphasizes that the world economy is undergoing a transformation, during which those countries whose economic and geopolitical leadership has not been in doubt for several decades are losing dominance [7]. In turn, a team of scientists led by A.A. Vakarev draws the reader's attention to the fact that the crisis that has developed against the background of the spread of coronavirus infection is of particular importance for the future of national and global economies, since it is based on the deep processes of economic transformation in the transition to a new technological order [8]. Economists remind us that the processes of transformation of the global economy model were repeatedly raised by Vladimir Putin in his speeches, including during his speech at a meeting of the Valdai discussion club: "some completely different time begins...we are not just on the threshold of cardinal changes, but the era of tectonic shifts, and in all spheres of life."[7] Scientists believe that the main dilemma of this crisis lies in the fact that "at present, the issue of abandoning the modern financial concept of the development of the world economy and returning to the production concept of development is very overdue" [8]. In this connection, it is concluded that a policy of reindustrialization of the national economy is necessary for long-term sustainable economic development. Scientists call the USA a leader and a pioneer in the implementation of such a policy [8]. The domestic economist S.A. Tolkachev writes about the first successes and problems of the new industrial policy of the USA [9]. Sergey Alexandrovich notes the active bipartisan nature of support for the reindustrialization policy, the growth in the number of jobs in the manufacturing industry and the improvement of the Reschoring Index (CRI). Among the threats to the implementation of the policy, the economist highlighted the uncompetitive production costs of the United States due to the overvalued dollar and the lack of qualified labor [9]. Jacques Sapir, Professor of Economics at the Paris Higher School of Social Sciences, in contrast to the above economists, describes in sufficient detail several reasons and scenarios for the development of the crisis situation in 2022. One of them is the financial crisis (up to the default of several banks or governments) caused by the growth of public debt and the general weakening of the banking and financial systems after the coronavirus pandemic [10]. The second scenario is much more associated with increased turbulence in the global economy, the strengthening of the sanctions regime in a number of countries, rising resource prices and a recession in the industrial sector of national economies. The result of the implementation of the second scenario, according to Sapir, may also be an insolvency crisis. However, unlike the first scenario, the starting point of the crisis will not be the financial, but the real sector of the economy, and, accordingly, the key actor will not be the Central Bank, but the government of states. A distinctive feature of the latter will be its long-term nature, a complete change in the economic model and a shift in the international balance of power from the G7 countries to the BRICS members [10]. A similar conclusion was reached by the domestic economist E.V. Balatsky as a result of the analysis of the relationship between the structure of social production and its efficiency on the basis of the provisions of the concept of cycles of capital accumulation by J.V. Balatsky. Arrigi in 2018 [11]. It should be noted that the provisions of the article remain extremely relevant in 2022 and can serve as a source of explanation of the nature of the current crisis processes. The scientist draws the reader's attention to the presence of the production, trade and financial sectors of the economy of their own development cycles, which are in antiphase with each other. At the end of the work, E.V. Balatsky predicts the growth of crisis processes in the global economy caused by the transformation of the global economy model and the emergence of the fifth cycle of capital accumulation with a leader in China and the loss of leadership of the United States [11]. Thus, economists who adhere to the second paradigm of explaining the crisis processes in the world economy point out that the pandemic is only an external factor that exposed the negative processes in the economy that have been brewing since the first decade of the XXI century. Their works highlight the problem of structural imbalances in the economy and the need to transform the economic model. In favor of the fidelity of the second paradigm of crisis processes in the world economy, according to the author of the work, statistical data characterizing the level of socio-economic development of developed countries testify. According to the latter, the decline in economic activity did not end after the passage of the active phase of the spread of coronavirus infection. For example, according to the results of 2021, annual inflation in the United States is 7% — this is the maximum value for the last four decades.[8] The rapid growth of inflation rates by the results of 2021 is also observed in European countries. In Germany, it was 3.1% - the highest rate since 1993.[9] In December 2021, inflation in the UK in annual terms was 5.4% - the highest in the last 30 years.[10] The reasons for the acceleration of inflation include weak performance of the real sector of the economy, unable to meet the demand of the population. According to the results of 2021, imports of US goods and services increased by 20.5% to 3.39 trillion US dollars, while exports increased by 18.5% to 2.53 trillion US dollars, resulting in a trade gap of 3.7% of GDP in 2021 versus 3.2% in 2020. The outstripping growth of imports to meet the needs of domestic demand has led to an increase in the US trade deficit to the largest value in the entire history of observations.[11] The dynamics of the growth of the negative balance of payments of developed countries and inflation, which is not "stopped" by an increase in the key rate, according to the author, may indicate that inflation is structural in nature.
In addition, it should be noted that the least negative economic effect of the "coronacrisis" was demonstrated in countries with a high share of the real economy and manufacturing in GDP. In recent decades, as a result of the transfer of production from developed countries to developing countries, Asian countries have become economies with a developed industrial sector. In this regard, despite a significant blow at the beginning of the pandemic, China's industrial sector was able not only to quickly return to the pre-pandemic pace, but also to increase the level of investment in the fixed capital of the manufacturing industry, which provided some stability to the economy of China and other Asian countries.[12] Thus, the advancing dynamics of the economic development of Asian countries and stagnation in European countries, which began before 2020 and the spread of coronavirus infection, may indicate the correctness of the second paradigm of the nature of crisis processes in the world economy, according to which the technological and world economic structure is changing in the world economy, "the transition of the palm of civilization from Western to Eastern civilization" [6, 8] and the spread of crisis processes in this regard. In the current conditions, according to the author, the policy of transformation of the model of national economies through reshoring and reindustrialization of the economy is relevant to resolve structural imbalances of social production in the direction of increasing the contribution of the real sector of the economy and the manufacturing industry to GDP. Conclusion Currently, crisis processes are spreading, negatively affecting the socio-economic situation in the world and national economies. The literature review allows us to conclude that there are two paradigms explaining their nature. According to the first, the source of crisis processes is chaotically emerging external factors in the global and national economies, in this case, the consequences of the spread of coronavirus infection, geopolitical tensions and difficulties of communication of economic entities. Scientists of the second paradigm believe that all of the above factors are only an external manifestation of the deep processes of transformation of the world and national economies caused by structural imbalances of social production. The choice of a paradigm explaining the nature of negative economic processes determines the way to resolve them. Thus, when focusing on the views of experts of the first paradigm, a way out of the crisis is possible through the development of mechanisms that reduce the influence of these external factors. When choosing the second paradigm to resolve crisis processes, a deep transformation of the model of global and national economies is necessary. One of the ways to transform the economic model can be the policy of reindustrialization and rescheduling. [1] World Employment and Social Outlook: Trends 2022. Geneva: International Labor Office, 2022. - URL: https://www.ilo.org/wcmsp5/groups/public/---dgreports/---dcomm/---publ/documents/publication/wcms_834081.pdf (accessed: 13.07.2022). [2] The world economy is facing recession, inflation and falling incomes - OECD. IA REGNUM. - URL: https://regnum.ru/news/economy/3613796.html (accessed: 13.07.2022). [3] World Bank. 2021. Global Economic Prospects, June 2021. Washington, DC: World Bank. - URL: https://openknowledge.worldbank.org/bitstream/handle/10986/35647/9781464816659.pdf (accessed: 03/19/2022). [4] Agarwal, R. and G. Gopinath (2021), "A proposal to end the COVID-19 pandemic", Staff Discussion Notes, No. 2021/004, International Monetary Fund, Washington, DC. – URL: https://www.imf.org/en/Publications/Staff-Discussion-Notes/Issues/2021/05/19/A-Proposal-to-End-the-COVID-19-Pandemic-460263 (accessed: 03/19/2022). [5] The Pandemic Stalls Growth in the Global Middle Class, Pushes Poverty Up Sharply. Advanced economies also see a decrease in living standards. Pew Research Center, March, 2021. - URL: https://www.pewresearch.org/global/2021/03/18/the-pandemic-stalls-growth-in-the-global-middle-class-pushes-poverty-up-sharply / (accessed: 07/20/2022). [6] Larry Elliott. Incessant crises show old economic model is running on empty. The Guardian. - URL: https://www.theguardian.com/business/2022/mar/13/incessant-crises-show-old-economic-model-is-running-on-empty-financial-crisis-covid-inflation-war (accessed: 03/19/2022). [7] Meeting of the Valdai discussion Club. Vladimir Putin took part in the final plenary session of the XVII annual meeting of the Valdai International Discussion Club via videoconference. – URL: http://kremlin.ru/events/president/news/64261 (accessed: 06.08.2022). [8] U.S. Inflation Shows More Staying Power After Hitting 7% in 2021. - URL: https://www.bloomberg.com/news/articles/2022-01-12/u-s-inflation-shows-more-staying-power-after-hitting-7-in-2021 (accessed: 05.08.2022). [9] German inflation rate at 3.1% in 2021, highest since 1993. – URL: https://news.cgtn.com/news/2022-01-07/German-inflation-rate-at-3-1-in-2021-highest-since-1993--16CRSfvB20g/index.html (accessed: 05.08.2022). [10] Consumer price inflation, UK: December 2021. – URL: https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/consumerpriceinflation/december2021 (accessed: 05.08.2022). [11] U.S. trade deficit hits record high in 2021. – URL: https://english.news.cn/20220209/600f738a29364fd386c6f2e9aef7c4ad/c.html (accessed: 05.08.2022). [12] United Nations Industrial Development Organization, 2021. Industrial Development Report – 2022. The future of industrialization in the post-pandemic world. Review. Vienna. – URL: https://www.unido.org/sites/default/files/files/2021-11/IDR%202022%20OVERVIEW%20-%20RU%20EBOOK.pdf (accessed: 06.08.2022).
References
1. Glazyev S. (2020) The pandemic crisis helped to strengthen the new technological order. Scientific works of the Free Economic Society of Russia, 5, 26-35. doi:10.38197/2072-2060-2020-225-5-26-35.
2. Sokolova D., Kovnir V. (2019) World Trade Organization in the context of the theory of long waves N. D. Kondratiev. Bulletin of the Chelyabinsk State University, 11, 7-14. doi: 10.24411/1994-2796-2019-11101.
3. Glazyev S., Aivazov A., Belikov V. (2019) Cyclic-wave theories of economic development and prospects for the world economy. Is the medium-term and expected development of the world economy predictable. Scientific works of the Free Economic Society of Russia, 5, 177-211.
4. Glazyev S. (2020) On the Deep Causes of Growing Chaos and Measures to Overcome the Economic Revolution. Eurasian Integration: Economics, Law, Politics, 2(32), 11-22. doi: 10.22394/2073-2929-2020-2-11-22.
5. Glazyev S. (2020) The Russian Economy at the Beginning of 2020: On the Deep Causes of Growing Chaos and a Complex of Anti-Crisis Measures. Russian Economic Journal, 2, 3-39. doi: 10.33983/0130-9757-2020-2-03-39.
6. Supyan V. (2020) The crisis of 2020 in the USA: testing the economic model. Russia and America in the XXI study, 3, 1.
7. Supyan V. (2020) The US Economy in a Polycentric World: Closed Positions. International Affairs, 5, 72-89.
8. Vakarev A., Vinogradov V., Burdyugova O., Ievleva N., Sycheva A. Overcoming the COVID-19 crisis: the reindustrialization of modern Russia. National Security / nota bene, 1, 55-70. doi: 10.7256/2454-0668.2022.1.37339.
9. Tolkachev S. (2022) Industrial Policy and Reshoring: Bidenomics Replaces Trumponomics. USA and Canada: Economics, Politics, Culture, 1, 21-38. doi: 10.31857/S2686673022010023.
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First Peer Review
Peer reviewers' evaluations remain confidential and are not disclosed to the public. Only external reviews, authorized for publication by the article's author(s), are made public. Typically, these final reviews are conducted after the manuscript's revision. Adhering to our double-blind review policy, the reviewer's identity is kept confidential.
The list of publisher reviewers can be found here.
The subject of the study. The subject of the study is the paradigms of crisis processes in the world economy in the 21st century. At the same time, the article does not formulate the purpose of the study, does not specify the object and subject of the study, the methods used by the author. The author points out the works of well-known authoritative Russian and foreign scientists who have analyzed the global economic development over the past 250 years from the point of view of a cyclical wave and structural approach as the theoretical and methodological basis of the study. The topic of the work is relevant due to the insufficient elaboration of the issue in the theoretical aspect and the practical significance of crisis management in macroeconomic and microeconomic aspects. Scientific novelty is a disadvantage. The author did not formulate the novelty of the undertaken research. The conclusion that it is necessary to develop mechanisms that reduce the influence of external factors and a deep transformation of the model of global and national economies contains an element of scientific novelty, but this conclusion must be confirmed by numbers., as the author says in conclusion, the style, structure, content of the work The style of the article is scientific, at the same time, the article is written in understandable language. The article presents the judgments available to the reader at a sufficient theoretical level. The structure of the article reflects the logic of solving the tasks set. The content of the article corresponds to the title. The material is presented sequentially. Disadvantages: The author does not disclose the content of the crisis processes leading to negative socio-economic consequences in both developed and developing countries, limiting himself to pointing to an increase in unemployment and a decrease in consumption. The author's thought is not entirely clear, what is the reason for the spread of crisis processes in the global economy (expressed before the section "conclusion"). It is necessary to eliminate typos, stylistic ones. and spelling mistakes. For example: - "Currently, crisis processes are spreading in the global and national economies, negatively affecting the socio-economic situation in them. The search for ways to restore the global and national economies is mediated by the task of determining the causes of the current crisis processes." - "... in the current circumstances, the search and development of ways out of the crisis situation is relevant ...". Colloquial expressions are allowed. There is an understatement, incompleteness in the conclusions. It would be necessary to formulate proposals based on the results of the analysis, revealing in more detail the main idea of the author. Bibliography The list of references corresponds to the stated research topic. The list of references includes modern publications by both Russian and foreign authors. Disadvantages: The list of references is designed in violation of GOST requirements. Appeal to opponents. There is practically no discussion point in the author's presentation. The author mainly relies on the works of the Academy of Sciences. Glazyeva S.Y. It is necessary to investigate the provisions contained in the works of other scientists. Conclusions, the interest of the readership The reviewed article arouses the interest of the readership. It is recommended to send the article for revision.
Second Peer Review
Peer reviewers' evaluations remain confidential and are not disclosed to the public. Only external reviews, authorized for publication by the article's author(s), are made public. Typically, these final reviews are conducted after the manuscript's revision. Adhering to our double-blind review policy, the reviewer's identity is kept confidential.
The list of publisher reviewers can be found here.
The purpose, subject and methods in the article are indicated correctly. The purpose of the study is to identify the main sources of crisis processes in the global economy. The economic crisis is accompanied by the destruction of normal economic activity, which is also associated with the rupture of familiar economic ties, a decrease in business activity, the inability to repay debts and the accumulation of debt obligations. This is a phenomenon of a market economy that repeats itself with a certain frequency, and depending on the scale, it can both concern a certain state and have global significance. The crisis is accompanied by a sharp decline in production, bankruptcy of enterprises, a drop in gross national product, a large-scale increase in unemployment, and often the depreciation of the national currency. The urgency of the problem is due to the fact that it is extremely difficult to find optimal ways to minimize the impact of the crisis on the global economy and the general situation in the country. The material of the article is structured in accordance with internal logic, at the end of the article not only conclusions for the scientific community are presented, but also ways out of economic crises are proposed, depending on the chosen paradigm. The style of the article is scientific, at the same time, the article is written in a language understandable to readers. Of the disadvantages, we can only note the lack of illustrative materials. The appeal to the opponents is presented, the author conducts a critical analysis of the opinions of various authors and publications on the subject of research, which allows us to judge the high degree of elaboration of the problem and the author's personal contribution to the increment of scientific knowledge, namely, the sources of crisis processes in the world economy. The list of references corresponds to the stated research topic. The article traces a thorough approach to the selection of scientific literature, the list of sources used contains 23 sources, of which almost half are foreign. The reviewer has some comments and suggestions: 1. To reduce confusion in the text, it is necessary to combine references and bibliography into one list of references at the end of the article. 2. The author formulated the novelty of the undertaken research. The conclusions set out in the "Conclusion" section contain an element of scientific novelty, but it is desirable to confirm them with figures. 3. In continuation of the previous remark, we note that the article would only benefit if the author, in addition to conclusions on the topic under study, also presented forecasts of specific changes in the social and economic spheres of society in the near and medium term, taking into account the two approaches studied in the article. The work fully meets the requirements for scientific research, is written on an urgent topic that will receive a response among the readership, and can be recommended for publication in the scientific journal "National Security / nota bene" after eliminating minor comments.
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