The pandemic changed the world for the second year in a row—not changing everything, but accelerating many things, from population decline to the digital revolution. Here is how these trends define 2022.

Baby bust: Couples have plenty of opportunities, but they obviously lack the desire to bring their children into a closed world. The decline in the birth rate has been reducing global economic growth and has declined at a faster rate during the pandemic, including the sharp decline in China. In the long run, baby bust will further shrink the world’s labor force. There have been 51 countries where the working-age population has declined, compared with 17 in 2000.

Pinnacle China: Due to baby booms, increased debt, and government intervention, China accounted for a quarter of global GDP growth in 2021, less than a third of the pre-pandemic.China’s dramatic shift from trade to “self-reliance” is Relax ties with other economiesThe almost perfect correlation between China’s GDP growth and other emerging countries’ GDP growth five years ago is almost non-existent now. China may have reached its peak as a growth engine.

Debt trap: Has been installed for four decades, Global debt Driven by government borrowing, it grew even faster during the pandemic. The total debt of 25 countries, including the United States and China, exceeded 300% of GDP, compared to zero in the mid-1990s. The currency printed by the central bank continues to inflate financial markets and deepen the debt trap. Obviously, societies obsessed with debt find it difficult to cut spending due to fear of bankruptcy and contagion.

Not in the 1970s: Few workers, More government spending Rising public debt points to higher inflation-but may not point to the double-digit levels of the 1970s as some experts feared. Government spending should slow down in 2022, and technological changes will continue to limit prices. The bigger risk is asset prices. The financial market has grown to four times the size of the global economy. When the market collapses, deflation often ensues.

Green inflation: It is well known that the fight against global warming is increasing the demand for green metals such as copper and aluminum; what is less known is that green politics is reducing the supply of various raw materials. In the past five years, investment in mines and oil fields has fallen sharply.turn out “Green inflation” in commodity prices, Which is the largest annual increase since 1973.

The productivity paradox: Hopes that the rapid adoption of digital services during the pandemic will end the long-term decline in global productivity growth has been dashed. The surge in 2020 was limited to the United States and gradually disappeared at the end of last year. Evidence to date shows that employees who work from home work longer hours and produce lower output. Despite the acceleration of technological change, the paradox of weak productivity still exists.

Data localization: The virus has hit an inward-turning world. Except data, the flow of everything (trade, capital, people) is declining. Internet traffic in 2022 may exceed all traffic before 2016, but it will be different. The authorities ignored the hope of Internet development beyond government control and prevented data from crossing national borders. The strictest regulations appear in emerging countries led by China, Saudi Arabia and India.

“Bubble” deflates: Although this is called the era “All Bubbles”Some assets do show typical signs of a bubble, from doubling prices in 12 months to frantic trading. These “bubbles” control cryptocurrency, clean energy, technology companies with no revenue, and Spacs. In the past year, everyone has witnessed a decline of 35% or more from the peak, and bubbles that exceed this line rarely recover. A silver lining: Tech bubbles like this often leave behind some potentially huge survivors.

Retail cooling: Retail investors rushed into the global bull market for the 13th year. Excitement and lateness often heralds The party is about to end. From the United States to Europe, millions of people opened trading accounts for the first time, and many borrowed money to buy stocks at a frantic rate. This frenzy rarely lasts, which suggests that even if the entire stock market is risk-free, the most popular name for retail investors may be.

Physical problems: The hype on Metaverse seems to herald a decline in the real economy, but prices do not. Digital natives also need physical shelters.The needs of millennials and Gen Z help Inflated housing market 2021. Future technology will not make physical resources obsolete. Electric cars consume more copper than gasoline cars. There is a person behind every avatar, and labor shortages are raising wages, even in the jobs most threatened by automation, such as truck driving. It is too early for a tangible Requiem.

The author is the chief global strategist of Morgan Stanley Investment Management, and the author of “Ten Rules for Successful Countries”