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Recent global turbulence raises a question: Is the world shifting to a new economic regime for the long run? New McKinsey Global Institute (MGI) research and a recent McKinsey executive survey1 suggest that it might be, but the shape of that future remains uncertain. Business leaders should be aware of potential scenarios so they can adjust and strategize accordingly.

MGI looks at economic health and wealth through a unique lens we refer to as the global balance sheet, a tool we borrowed from the corporate world to sum up all of the world’s assets and liabilities, including net worth. Our view through this lens indicates that the developments of the past 20 years have contributed to today’s economic, financial, and market wobbles.2

In this article, we will examine the dynamics that led to the expansion of the global balance sheet. We will then propose four scenarios for what might come next, describing in broad strokes the impact each could have on the global economy and identifying which scenario the roughly 1,000 executives and asset managers we surveyed consider the most likely. Finally, we will suggest steps business leaders could consider in order to plan for whichever scenario prevails.