The Winter of Our Discomfort

From the pandemic and geopolitical tensions to broader macroeconomic developments, new obstacles to "normality" seem to be cropping up everywhere. As the uncertainties continue to mount, the risk of misjudgments and policy errors at all levels of society will grow.

CAMBRIDGE – The start of 2022 has been marked by a deepening sense of unease, and not just within governments as they confront challenges relating to health, the economy, geopolitics, and, in some cases, national and financial security. Households and a wide range of companies are feeling it, too. All have been pushed out of, or kept away from, “normality” much longer than expected.

COVID-19 is a relevant factor, of course, but it has been joined by several other developments, from rising geopolitical tensions and inflation to household financial vulnerability, labor shortages, and market volatility.

The Omicron variant has driven COVID-19 infections to levels that would have been deemed very dangerous with previous dominant variants such as Alpha or Delta. Fortunately, Omicron has proven to be less severe, with new cases much less likely to lead to hospitalization or death. Indeed, many hope that Omicron eventually will allow a transition from the highly disruptive pandemic of the past two years. In this scenario, the coronavirus would become endemic but relatively manageable, especially if we adjust how we do certain things.

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