Eswar Prasad is a professor of economics at Cornell University and former head of the IMF's China division. He is an authority on financial globalisation.
In his book "The Doom Loop" (2026), Mr Prasad argues that the shifting balance of power between countries—the rise of China and India, the waning dominance of the West—has transformed the world economy into an engine for disorder. Rather than deploying their power constructively, he contends, countries have allowed the feedback loop between economics, domestic politics and geopolitics to spiral out of control. Cross-border flows of trade and capital, which ought to have improved relations between rival powers, have instead begun to reorient along geopolitical lines. Businesses that benefit from government subsidies or tariffs now have incentives to encourage discord that might prompt yet more subsidies and tariffs. The race to replace the dollar as the global reserve currency has led to a fragmented second tier of alternatives. Mr Prasad makes the intriguing argument that competition, normally thought to promote better outcomes in industries such as technology and health care, instead promotes chaos when applied to geopolitics.
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