The Doom Loop: Why the World Economic Order Is Spiraling into Disorder

by Eswar S. Prasad

The acclaimed economist and author of The Future of Money argues that the forces meant to stabilize the world’s economy are in fact driving global instability.

“Prasad’s deep analysis offers critical insights into how we can escape our current predicament.” —Fiona Hill, author of There Is Nothing for You Here

Global economic power is shifting, liberal market-oriented democracies face growing domestic turmoil, and international trade and financial integration is crumbling. How did we get here?

In The Doom Loop, economist Eswar Prasad argues that the very forces that we long believed could stabilize the world order are fueling its destabilization. Rather than promoting shared prosperity, globalization has instead deepened economic inequality, stoked political backlash, and prompted escalating trade wars. Institutions like the International Monetary Fund and World Trade Organization, founded to foster international cooperation, have failed to adapt to twenty-first-century realities. The rise of “middle power” countries like India, Brazil, and Indonesia once suggested a stable multipolar future, but today, such nations are increasingly forced to pick sides as the United States and China fight for global dominance.

Prasad argues that we are caught in a destructive feedback loop between economics, domestic politics, and geopolitics. The Doom Loop offers a clear-eyed and bracing account of a world spiraling into disorder, and makes it clear that old solutions cannot pull us out—we need radically new solutions to solve the world’s problems.

Kindle Edition

Expected publication February 3, 2026

About the author

Eswar S. Prasad is the Tolani Senior Professor of Trade Policy and Professor of Economics at Cornell University. He is also a Senior Fellow at the Brookings Institution, where he holds the New Century Chair in International Economics, and a research associate at the National Bureau of Economic Research. He is the author of Gaining Currency: The Rise of the Renminbi and The Dollar Trap: How the U.S. Dollar Tightened Its Grip on Global Finance.

Reviews

[ROLLAND Florence · Rating 5 out of 5]

This book reads like a university course (this is actually a compliment). A truly good surprise, and not a doom read at all.

The author is a university professor in trade policy and economics. It shines through The Doom Loop. The reader is invited to walk through different areas and concepts in order to understand the economics of international trade (at the college introduction course level). You can read the chapters independently, depending on what you are curious about. A lot of connections are also made between international trade and political economics. Occasionally, there is some comic relief (like the EU rules about bananas) in order to illustrate this or that concept. Everything is there for good reason, though - anecdotes are never a waste of your time, and they always serve the global narrative.

Long story short: I liked The Doom Loop. A lot of it was actually a nice refresh of the political economics course that I took in university in 2010. The constant connection with recent events puts everything in a very useful light. You will understand better why China and India are trying to stay out of the war in Ukraine, for instance. Or why Trump thinks that tariffs will make America great again (spoiler alert, they won't). Or why we seem embarked collectively in a doom loop, with one financial crisis following the other.

Without completely spoiling the book, this is not a doom-and-gloom type of read.
Actually, it leaves you feeling quite hopeful.
First, because it will make you feel clever (unless you are already very knowledgeable about economics, and have nothing to learn from this book). It always feels good to understand things and see them in a new light.

I suggest that you actually start with the Introduction, skip directly to chapter 7 (in order to understand the global vision that Eswar S Prasad had for the book), and then read through chapters 1 to 6 (you will already know where the author is going, and it will help you put what you read into perspective). Then, satisfied with your newfound knowledge and understanding of international trade, read through chapter 7 again. Finish with chapter 8. Breathe, and thank yourself for dedicating a few hours of your life to reading economics.

My own reflections after reading The Doom Loop

Yes, we are going through difficult times. Yes, in most countries, institutions (such as central banks) are weakened by corruption and are not serving the interests of the people. Yes, Trump's second term is a disaster: for the US, but also for all the countries that are dragged in the chaos. But what led to this chaos in the first place? As the rules of the game are changing, and as former "third world countries" are becoming major international players (I am looking at you, India), the US and Europe are mourning their empire. Frustration gives way to misguided policies (like agressive tariffs to "punish" China).

The order that too many people are mourning was never fair to begin with. It relied on the exploitation of other countries, perceived as weaker, and treated as vassals. Many new technologies (fintech, AI, cryptocurrencies, cheap international communication...) are redefining the relationships between countries, but also the relationships between people of the same country. National and international interests are not necessarily in competition. This is not a zero-sum game. There is a future where we can globally benefit from the shift that is happening... But it requires strong democracies and clear rules.

If we want to get out of the doom loop, we need to defend the institutions that support democracy and international trade.

Thank you #NetGalley, Venture NY and Eswar S. Prasad for the ARC.