Prof G Markets The World Is In a Doom Loop — ft. Eswar Prasad
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Feb 13, 2026 
Eswar Prasad, Cornell professor and former IMF Financial Studies chief, explains his thesis that global economic, political, and geopolitical forces form a self-reinforcing negative loop. He discusses globalization shifting to zero-sum politics. He warns about rising U.S. debt, fragile housing supply and zoning, and how AI and inequality could reshape opportunity and policy.
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Globalization Became A Zero-Sum Narrative
- Globalization has shifted from a positive-sum to a perceived zero-sum game, fueling geopolitics and domestic resentment.
- That feedback loop between economics, politics, and geopolitics creates instability rather than a smooth transition.
Productivity Masks Underlying Fragilities
- The U.S. shows remarkable productivity growth that masks deeper tensions beneath the surface.
- That productivity cushions growth and inflation but doesn't eliminate fiscal and social fragilities.
Debt Interest Squeezes Productive Investment
- Rising interest payments on government debt divert funds from productive investment and threaten growth.
- The dollar gives the U.S. leeway, but investor patience could end, causing sharp negative effects.
