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Here’s What Could Make the Next Global Recession Even Worse

This year’s Davos is all about a shared future, but that could mean more extreme ups and downs for the world’s economy.
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Illustration: Kati Szilagyi for Bloomberg Businessweek

Aside from snow, sharing is the most abundant commodity in the Swiss ski village of Davos every January. Coordination, collaboration, and joint commitment are the watchwords of the annual meeting of the World Economic Forum. This year’s theme, in line with Davos tradition, is “Creating a Shared Future in a Fractured World.”

Can there be too much of a good thing, though? If countries coordinate their economic policies too closely, their business cycles could become overly synchronized, leading to booms—and busts—that are global in scale. And if there’s just one unified world financial architecture, mistakes could propagate through it more quickly and destructively than if there are multiple, competing systems.