Shocks, Crises, and False Alarms … War. Inflation. Recession. Pandemic … The pursuit of economic stability is increasingly unrealisable … so how do business leaders plan and act for a turbulent future?

January 28, 2024

War. Inflation. Recession. Pandemic. The pursuit of economic stability is increasingly unrealisable, with the volatility of recent years challenging leaders and companies to find new ways to create value as they navigate the changing business landscape.

When turmoil hits, business leaders and investors face notoriously unreliable macroeconomic forecasts, whipsawing data, and contradictory opinions. Are disruptions transient and ephemeral—or permanent and structural? False alarms are costly traps, but so are true structural changes that go undetected. Leaders must also assess the doom-laden public macroeconomic discourse, which habitually presents worst-case scenarios as foregone conclusions.

How can business leaders avoid these traps and make better strategic decisions?

Shocks, Crises, and False Alarms

In his new book, Shocks, Crises, and False Alarms, BCG Global Chief Economist Philipp Carlsson-Szlezak and Senior Economist Paul Swartz provide a fresh and accessible way to analyse and understand the macroeconomy, or what they call “regime analysis”, that pushes beyond conventional model-based prediction to emphasise structural context and judgment.

Focusing on what it takes for macroeconomic regimes to break, they apply their approach to key risks in the real economy, financial structures, and geopolitical arrangements to help senior executives and investors assess the true risks of their economic context and to build their capacity to respond to changing conditions more effectively.

With dose of rational optimism, the book explores the key macro debates and controversies that shape our time, and it empowers leaders with the analytical skills to assess and judge macroeconomic risks for themselves, with a new way of thinking that will continue to apply as risks change over time.