# A Mild Global Contraction Is Coming.

1 Opinion June 27, 2023 Project Syndicate ![Nouriel Roubini](/sites/default/files/styles/246w/public/assets/images/nroubini.jpg?itok=R6F5VNmo)By Nouriel Roubini

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There are currently four scenarios for the global economic outlook. Three of these entail potentially serious risks with far-reaching implications for markets.

The most positive is a “soft landing,” where central banks in the advanced economies manage to bring inflation back down to their 2% targets without triggering a recession. There is also the possibility of a softish landing. Here the inflation target is achieved, but through a relatively mild (short and shallow) recession.

The third scenario is a hard landing, where returning to 2% inflation requires a protracted recession with potentially severe financial instability (such as more bank distress and highly leveraged agents suffering serious debt-servicing difficulties). If the effort to tame inflation triggers severe economic and financial instability, a fourth scenario becomes possible: central banks wimp out and decide to allow for above-target inflation, risking a de-anchoring of inflation expectations and a persistent wage-price spiral.

Read the full [*Project Syndicate* article](https://www.project-syndicate.org/commentary/global-economic-outlook-implications-for-equities-bonds-by-nouriel-roubini-2023-06?referral=ef53cb).
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*Nouriel Roubini is a Professor Emeritus of Economics and International Business and the Robert Stansky Research Faculty Fellow.*

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