Policymakers and too many economic commentators fail to grasp how the next global recession may be unlike the last two. In contrast to recessions driven mainly by a demand shortfall, the challenge posed by a supply-side-driven downturn is that it can result in sharp drops in production, generalized shortages, and rapidly rising prices.

Following the fall of the Berlin Wall in November 1989, open societies were triumphant and international cooperation became the dominant creed. Thirty years later, however, nationalism has turned out to be much more powerful and disruptive than internationalism.