China, Germany’s biggest trading partner, is expected to see substantially slower growth than in the previous decade, reporting on Friday that the economy expanded just 0.4 percent in the second quarter. That slowdown is likely to ripple through other emerging nations in Asia, dragging down their growth as well.

security risks of globalized trade?

Some economists have argued that the German business models were partly based on an erroneous assumption and that cheap Russian gas wasn’t as cheap as it looked.

The economist Joseph Stiglitz, a Nobel laureate, said the market failed to accurately price in the risk — however unlikely it may have seemed at the time — that Russia could decide to reduce or withhold gas to apply political pressure.

It would be like figuring the costs of building a ship without including the cost of lifeboats.

“They didn’t take into account what could happen,” Mr. Stiglitz said.

Inflation last month was 7.6 percent. Investor confidence in Germany has dropped to its lowest point in a decade.

in February.)

Households, hospitals and essential services will be considered priorities if gas rationing becomes unavoidable, but industrial representatives have been pleading their cases in Berlin.

as much as 12 percent once ripple effects on industries beyond energy and consumers were taken into account.

Looking ahead to the winter, Mr. Krebs said much depended on the temperature and Russian gas delivery levels.

“The best case is stagnation with high inflation,” he said. But over the longer term, he argued, Germany could come out more competitive if it manages the energy transition well and provides speedy and significant public investment to create the requisite infrastructure.

Marcel Fratzscher, president of the German Institute for Economic Research, agreed. Germany’s industrial success is based on added value more than cheap energy, he said. Most German exports, he said, are “highly specialized products — that gives them an advantage and makes them competitive.”

Labor policy, too, will have an impact.

Wage negotiations for the industrial sector are scheduled to begin in September. The powerful I.G. Metall union will seek an 8 percent wage increase for its 3.9 million members. And starting Oct. 1, a new minimum wage law will establish for the first time a single national rate — 12 euros an hour.

For now, supply chain breakdowns are still causing headaches, and businesses that were only beginning to recover from the Covid-19 pandemic are busy devising contingency plans for gas shortages.

Beiersdorf, maker of skin care products including Nivea, has had a crisis team in place since May to draw up backup plans — including readying diesel generators — to ensure production keeps running.

At Schmees, high costs have already forced the shutdown of one furnace, cutting into the foundry’s ability to meet deadlines. Customers waiting for deliveries of stainless steel include companies that run massive turbines used in icebreaker ships and artists who use it in their sculptures.

Mr. Schmees, an energetic man who prides himself on having nurtured a strong company culture, is planning to ask his employees to work a six-day week through the end of the year, to ensure that he can fill all of the firm’s orders by December. That is how long he’s betting that Germany’s natural gas supplies will hold if Russia cuts off the flow entirely.

“The tragedy,” Mr. Schmees said, “is that we have only now realized what we’ve gambled away with this cheap gas from Russia.”

Katrin Bennhold contributed reporting from Berlin.

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Global Growth Will Be Choked Amid Inflation and War, World Bank Says

For large and small nations around the globe, the prospect of averting a recession is fading.

That grim prognosis came in a report Tuesday from the World Bank, which warned that the grinding war in Ukraine, supply chain chokeholds, Covid-related lockdowns in China, and dizzying rises in energy and food prices are exacting a growing toll on economies all along the income ladder. This suite of problems is “hammering growth,” David Malpass, the bank’s president, said in a statement. “For many countries, recession will be hard to avoid.”

World growth is expected to slow to 2.9 percent this year from 5.7 percent in 2021. The outlook, delivered in the bank’s Global Economic Prospects report, is not only darker than one produced six months ago, before Russia’s invasion of Ukraine, but also below the 3.6 percent forecast in April by the International Monetary Fund.

Growth is expected to remain muted next year. And for the remainder of this decade, it is forecast to fall below the average achieved in the previous decade.

poorer, hungrier and less secure.

Roughly 75 million more people will face extreme poverty than were expected to before the pandemic.

Per capita income in developing economies is also expected to fall 5 percent below where it was headed before the pandemic hit, the World Bank report said. At the same time, government debt loads are getting heavier, a burden that will grow as interest rates increase and raise the cost of borrowing.

“In Egypt more than half of the population is eligible for subsidized bread,” said Beata Javorcik, chief economist at the European Bank for Reconstruction and Development. “Now, that’s going to be much more expensive for government coffers, and it’s happening where countries are already more indebted than before.”

stock market’s woes. The conflict has caused​​ dizzying spikes in gas prices and product shortages, and is pushing Europe to reconsider its reliance on Russian energy sources.

“Insecurity and violence continue to weigh on the outlook” for many low-income countries, the World Bank said, while “more rapid increases in living costs risk further escalating social unrest.” Several studies have pointed to rising food prices as an important trigger for the Arab Spring uprisings in 2011.

In Latin American and the Caribbean, growth is expected to slow to 2.5 percent from 6.7 percent last year. India’s total output is forecast to drop to 7.5 percent from 8.7 percent, while Japan’s is expected to remain flat at 1.7 percent.

The World Bank, founded in the shadow of World War II to help rebuild ravaged economies, provides financial support to low- and middle-income nations. It reiterated its familiar basket of remedies, which include limiting government spending, using interest rates to dampen inflation and avoiding trade restrictions, price controls and subsidies.

Managing to tame inflation without sending the economy into a tailspin is a difficult task no matter what the policy choices are — which is why the risks of stagflation are so high.

At the same time, the United States, the European Union and allies are struggling to isolate Russia, starving it of resources to wage war, without crippling their own economies. Many countries in Europe, including Germany and Hungary, are heavily dependent on either Russian oil or gas.

The string of disasters — the pandemic, droughts and war — is injecting a large dose of uncertainty and draining confidence.

Among its economic prescriptions, the World Bank underscored that leaders should make it a priority to use public spending to shield the most vulnerable people.

That protection includes blunting the impact of rising food and energy prices as well as ensuring that low-income countries have sufficient supplies of Covid vaccines. So far, only 14 percent of people in low-income countries have been fully vaccinated.

“Renewed outbreaks of Covid-19 remain a risk in all regions, particularly those with lower vaccination coverage,” the report said.

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Biden Has ‘Only Bad Options’ for Bringing Down Oil Prices

HOUSTON — When President Biden meets Crown Prince Mohammed bin Salman in Saudi Arabia, he will be following in the footsteps of presidents like Jimmy Carter, who flew to Tehran in 1977 to exchange toasts with the shah of Iran on New Year’s Eve.

Like the prince, the shah was an unelected monarch with a tarnished human rights record. But Mr. Carter was obliged to celebrate with him for a cause that was of great concern to people back home: cheaper gasoline and secure oil supplies.

As Mr. Carter and other presidents learned, Mr. Biden has precious few tools to bring down costs at the pump, especially when Russia, one of the world’s largest energy producers, has started an unprovoked war against a smaller neighbor. In Mr. Carter’s time, oil supplies that Western countries needed were threatened by revolutions in the Middle East.

During the 2020 campaign, Mr. Biden pledged to turn Saudi Arabia into a “pariah” for the assassination of a prominent dissident, Jamal Khashoggi. But officials said last week that he planned to visit the kingdom this summer. It was just the latest sign that oil has again regained its centrality in geopolitics.

oil prices fell below zero at the start of the pandemic. Big companies like Exxon Mobil, Chevron, BP and Shell have largely stuck to the investment budgets they set last year before Russia invaded Ukraine.

Energy traders have become so convinced that the supply will remain limited that the prices of the U.S. and global oil benchmarks climbed after news broke that Mr. Biden was planning to travel to Saudi Arabia. Oil prices rose to about $120 a barrel on Friday, and the national average price for a gallon of regular gasoline was $4.85 on Sunday, according to AAA, more than 20 cents higher than a week earlier and $1.80 above a year ago.

Another Biden administration effort that has appeared to fall flat is a decision to release a million barrels of oil daily from the Strategic Petroleum Reserve. Analysts said it was hard to discern any impact from those releases.

The Biden team has also been in talks with Venezuela and Iran, but progress has been halting.

The administration recently renewed a license that partly exempts Chevron from U.S. sanctions aimed at crippling the oil industry in Venezuela. In March, three administration officials traveled to Caracas to draw President Nicolás Maduro into negotiations with the political opposition.

In another softening of sanctions, Repsol of Spain and Eni of Italy could begin shipping small amounts of oil from Venezuela to Europe in a few weeks, Reuters reported on Sunday.

Venezuela, once a major exporter to the United States, has the world’s largest petroleum reserves. But its oil industry has been so crippled that it could take months or even years for the country to substantially increase exports.

With Iran, Mr. Biden is seeking to revive a 2015 nuclear accord that President Donald J. Trump pulled out of. A deal could free Iran to export more than 500,000 barrels of oil a day, easing the global supply crunch and making up for some of the barrels that Russia is not selling. Iran also has roughly 100 million barrels in storage, which could potentially be released quickly.

But the nuclear talks appear to be mired in disagreements and are not expected to bear fruit soon.

Of course, any deals with either Venezuela or Iran could themselves become political liabilities for Mr. Biden because most Republicans and even some Democrats oppose compromises with the leaders of those countries.

“No president wants to remove the Revolutionary Guards of Iran from the terrorist list,” Ben Cahill, an energy expert at the Center for Strategic and International Studies in Washington, said about one of the sticking points in the talks with Iran. “Presidents are wary of any moves that look like they are making political sacrifices and handing a win to America’s adversaries.”

Foreign-policy experts say that while energy crises during war are inevitable, they always seem to surprise administrations, which are generally unprepared for the next crisis. Mr. Bordoff, the Obama adviser, suggested that the country invest more in electric cars and trucks and encourage more efficiency and conservation to lower energy demand.

“The history of oil crises shows that when there is a crisis, politicians run around like chickens with their heads cut off, trying to figure out what they can do to provide immediate relief to consumers,” Mr. Bordoff said. U.S. leaders, he added, need to better prepare the country for “the next time there is an inevitable oil crisis.”

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Elvira Nabiullina, Head of the Central Bank, Is Guiding Russia’s Economy

“She’s well-trusted in the government and by the president,” said Sofya Donets, an economist at Renaissance Capital in Moscow who worked at the central bank from 2007 to 2019. In recent years, it was quite evident that all kinds of policy questions in the financial sphere were delegated to the central bank, she added.

This trust was built up while Ms. Nabiullina was buttressing Russia’s economy against Western sanctions, especially from the long reach of American penalties. In 2014, the United States cut off many major Russian companies from its capital markets. But these companies had large amounts of foreign currency debt, raising alarms over how they would service their debts.

Ms. Nabiullina set about squeezing as many U.S. dollars from the economy as possible, so that companies and banks would be less vulnerable if Washington further restricted access to the country’s use of dollars.

She also shifted the bank’s reserves, which grew to be worth more than $600 billion, toward gold, the euro and the Chinese renminbi. Over her tenure, the share of dollars in the reserves fell to about 11 percent, from more than 40 percent, Ms. Nabiullina told Parliament last month. Even after sanctions froze the bank’s overseas reserves, the country has “sufficient” reserves in gold and renminbi, she told lawmakers.

Other protections against sanctions included an alternative to SWIFT, the global banking messaging system, developed in recent years. And the bank changed the payments infrastructure to process credit card transactions in the country so even the exit of Visa and Mastercard would have minimal effect.

In March, Bloomberg News and The Wall Street Journal, citing unidentified sources, reported that Ms. Nabiullina had tried to resign after the Ukraine invasion, and had been rebuffed by Mr. Putin. The central bank rejected those reports.

Last month, the Canadian government placed her under sanctions for being a “close associate of the Russian regime.”

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Amid Sanctions, Putin Reminds the World of His Own Economic Weapons

LONDON — In the five weeks since Russia invaded Ukraine, the United States, the European Union and their allies began an economic counteroffensive that has cut off Russia’s access to hundreds of billions of dollars of its own money and halted a large chunk of its international commerce. More than 1,000 companies, organizations and individuals, including members of President Vladimir V. Putin’s inner circle, have been sanctioned and relegated to a financial limbo.

But Mr. Putin reminded the world this past week that he has economic weapons of his own that he could use to inflict some pain or fend off attacks.

Through a series of aggressive measures taken by the Russian government and its central bank, the ruble, which had lost nearly half of its value, clawed its way back to near where it was before the invasion.

And then there was the threat to stop the flow of gas from Russia to Europe — which was set off by Mr. Putin’s demand that 48 “unfriendly countries” violate their own sanctions and pay for natural gas in rubles. It sent leaders in the capitals of Germany, Italy and other allied nations scrambling and showcased in the most visible way since the war began how much they need Russian energy to power their economies.

Russian oil exports normally represent more than one of every 10 barrels the world consumes.

Europe’s ongoing energy purchases send as much as $850 million each day into Russia’s coffers, according to Bruegel, an economics institute in Brussels. That money helps Russia to fund its war efforts and blunts the impact of sanctions. Because of soaring energy prices, gas export revenues from Gazprom, the Russian energy giant, injected $9.3 billion into the country’s economy in March alone, according an estimate by Oxford Economics, a global advisory firm.

Ursula von der Leyen, said as much when she announced the new energy plan last month: “We simply cannot rely on a supplier who explicitly threatens us.”

Security concerns aren’t the only development that has undermined Russia’s standing as a long-term energy supplier. What seemed surprising to economists, lawyers and policymakers about Mr. Putin’s demand to be paid in rubles was that it would have violated sacrosanct negotiated contracts and revealed Russia’s willingness to be an unreliable business partner.

As he has tried to wield his energy clout externally, Mr. Putin has taken steps to insulate Russia’s economy from the impact of sanctions and to prop up the ruble. Few things can undermine a country as systemically as an abruptly weakened currency.

When the allies froze the assets of the Russian central bank and sent the ruble into a downward spiral, the bank increased the interest rate to 20 percent, while the government mandated that companies convert 80 percent of the dollars, euros and other foreign currencies they earn into rubles to increase demand and drive up the price.

S&P Global survey of purchasing managers at Russian manufacturing companies showed severe declines in production, employment and new orders in March, as well as sharp price increases.

500 foreign companies have pulled up stakes in Russia, scaled back operations and investment, or pledged to do so.

“Russia does not have the capabilities to replicate domestically the technology that it would otherwise have gained from overseas,” according to an analysis by Capital Economics, a research group based in London. That is not a good sign for increasing productivity, which even before the war, was only 35 to 40 percent of the United States’.

The result is that however the war in Ukraine ends, Russia will be more economically isolated than it has been in decades, diminishing whatever leverage it now has over the global economy as well as its own economic prospects.

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Live Updates: Biden Says He Stands by His Putin Comments

Nokia said this month that it would stop its sales in Russia and denounced the invasion of Ukraine. But the Finnish company didn’t mention what it was leaving behind: equipment and software connecting the government’s most powerful tool for digital surveillance to the nation’s largest telecommunications network.

The tool was used to track supporters of the Russian opposition leader Aleksei A. Navalny. Investigators said it had intercepted the phone calls of a Kremlin foe who was later assassinated. Called the System for Operative Investigative Activities, or SORM, it is also most likely being employed at this moment as President Vladimir V. Putin culls and silences antiwar voices inside Russia.

For more than five years, Nokia provided equipment and services to link SORM to Russia’s largest telecom service provider, MTS, according to company documents obtained by The New York Times. While Nokia does not make the tech that intercepts communications, the documents lay out how it worked with state-linked Russian companies to plan, streamline and troubleshoot the SORM system’s connection to the MTS network. Russia’s main intelligence service, the F.S.B., uses SORM to listen in on phone conversations, intercept emails and text messages, and track other internet communications.

Credit…The New York Times

The documents, spanning 2008 to 2017, show in previously unreported detail that Nokia knew it was enabling a Russian surveillance system. The work was essential for Nokia to do business in Russia, where it had become a top supplier of equipment and services to various telecommunications customers to help their networks function. The business yielded hundreds of millions of dollars in annual revenue, even as Mr. Putin became more belligerent abroad and more controlling at home.

For years, multinational companies capitalized on surging Russian demand for new technologies. Now global outrage over the largest war on European soil since World War II is forcing them to re-examine their roles.

The conflict in Ukraine has upended the idea that products and services are agnostic. In the past, tech companies argued it was better to remain in authoritarian markets, even if that meant complying with laws written by autocrats. Facebook, Google and Twitter have struggled to find a balance when pressured to censor, be it in Vietnam or in Russia, while Apple works with a state-owned partner to store customer data in China that the authorities can access. Intel and Nvidia sell chips through resellers in China, allowing the authorities to buy them for computers powering surveillance.

The lessons that companies draw from what’s happening in Russia could have consequences in other authoritarian countries where advanced technologies are sold. A rule giving the U.S. Commerce Department the power to block companies, including telecom equipment suppliers, from selling technology in such places was part of a bill, called the America Competes Act, passed by the House of Representatives in February.

“We should treat sophisticated surveillance technology in the same way we treat sophisticated missile or drone technology,” said Representative Tom Malinowski, a New Jersey Democrat who was an assistant secretary of state for human rights in the Obama administration. “We need appropriate controls on the proliferation of this stuff just as we do on other sensitive national security items.”

Andrei Soldatov, an expert on Russian intelligence and digital surveillance who reviewed some of the Nokia documents at the request of The Times, said that without the company’s involvement in SORM, “it would have been impossible to make such a system.”

“They had to have known how their devices would be used,” said Mr. Soldatov, who is now a fellow at the Center for European Policy Analysis.

Credit…The New York Times

Nokia, which did not dispute the authenticity of the documents, said that under Russian law, it was required to make products that would allow a Russian telecom operator to connect to the SORM system. Other countries make similar demands, the company said, and it must decide between helping make the internet work or leaving altogether. Nokia also said that it did not manufacture, install or service SORM equipment.

The company said it follows international standards, used by many suppliers of core network equipment, that cover government surveillance. It called on governments to set clearer export rules about where technology could be sold and said it “unequivocally condemns” Russia’s invasion of Ukraine.

“Nokia does not have an ability to control, access or interfere with any lawful intercept capability in the networks which our customers own and operate,” it said in a statement.

MTS did not respond to requests for comment.

The documents that The Times reviewed were part of almost two terabytes of internal Nokia emails, network schematics, contracts, license agreements and photos. The cybersecurity firm UpGuard and TechCrunch, a news website, previously reported on some of the documents linking Nokia to the state surveillance system. Following those reports, Nokia played down the extent of its involvement.

But The Times obtained a larger cache showing Nokia’s depth of knowledge about the program. The documents include correspondence on Nokia’s sending engineers to examine SORM, details of the company’s work at more than a dozen Russian sites, photos of the MTS network linked to SORM, floor plans of network centers and installation instructions from a Russian firm that made the surveillance equipment.

After 2017, which is when the documents end, Nokia continued to work with MTS and other Russian telecoms, according to public announcements.

SORM, which dates to at least the 1990s, is akin to the systems used by law enforcement around the world to wiretap and surveil criminal targets. Telecom equipment makers like Nokia are often required to ensure that such systems, known as lawful intercept, function smoothly within communications networks.

In democracies, the police are generally required to obtain a court order before seeking data from telecom service providers. In Russia, the SORM system sidesteps that process, working like a surveillance black box that can take whatever data the F.S.B. wants without any oversight.

In 2018, Russia strengthened a law to require internet and telecom companies to disclose communications data to the authorities even without a court order. The authorities also mandated that companies store phone conversations, text messages and electronic correspondence for up to six months, and internet traffic history for 30 days. SORM works in parallel with a separate censorship system that Russia has developed to block access to websites.

Civil society groups, lawyers and activists have criticized the Russian government for using SORM to spy on Mr. Putin’s rivals and critics. The system, they said, is almost certainly being used now to crack down on dissent against the war. This month, Mr. Putin vowed to remove pro-Western Russians, whom he called “scum and traitors,” from society, and his government has cut off foreign internet services like Facebook and Instagram.

Credit…Andrey Rudakov/Bloomberg

Nokia is best known as a pioneer of mobile phones, a business it sold in 2013 after Apple and Samsung began dominating the market. It now makes the bulk of its $24 billion in annual sales providing telecom equipment and services so phone networks can function. Roughly $480 million of Nokia’s annual sales come from Russia and Ukraine, or less than 2 percent of its overall revenue, according to the market research firm Dell’Oro.

Last decade, the Kremlin had grown serious about cyberspying, and telecom equipment providers were legally required to provide a gateway for spying. If Nokia did not comply, competitors such as the Chinese telecom giant Huawei were assumed to be willing to do so.

By 2012, Nokia was providing hardware and services to the MTS network, according to the documents. Project documentation signed by Nokia personnel included a schematic of the network that depicted how data and phone traffic should flow to SORM. Annotated photos showed a cable labeled SORM plugging into networking equipment, apparently documenting work by Nokia engineers.

Credit…The New York Times

Flow charts showed how data would be transmitted to Moscow and F.S.B. field offices across Russia, where agents could use a computer system to search people’s communications without their knowledge.

Specifics of how the program is used have largely been kept secret. “You will never know that surveillance was carried out at all,” said Sarkis Darbinyan, a Russian lawyer who co-founded Roskomsvoboda, a digital rights group.

But some information about SORM has leaked out from court cases, civil society groups and journalists.

In 2011, embarrassing phone calls made by the Russian opposition leader Boris Y. Nemtsov were leaked to the media. Mr. Soldatov, who covered the incident as an investigative reporter, said the phone recordings had come from SORM surveillance. Mr. Nemtsov was murdered near the Kremlin in 2015.

In 2013, a court case involving Mr. Navalny included details about his communications that were believed to have been intercepted by SORM. In 2018, some communications by Mr. Navalny’s supporters were tracked by SORM, said Damir Gainutdinov, a Russian lawyer who represented the activists. He said phone numbers, email addresses and internet protocol addresses had been merged with information that the authorities collected from VK, Russia’s largest social network, which is also required to provide access to user data through SORM.

Credit…The New York Times

“These tools are used not just to prosecute somebody but to fill out a dossier and collect data about somebody’s activities, about their friends, partners and so on,” said Mr. Gainutdinov, who now lives in Bulgaria. “Officers of the federal security service, due to the design of this system, have unlimited access to all communication.”

By 2015, SORM was attracting international attention. That year, the European Court of Human Rights called the program a “system of secret surveillance” that was deployed arbitrarily without sufficient protection against abuse. The court ultimately ruled, in a case brought by a Russian journalist, that the tools violated European human rights laws.

In 2016, MTS tapped Nokia to help upgrade its network across large swaths of Russia. MTS set out an ambitious plan to install new hardware and software between June 2016 and March 2017, according to one document.

Nokia performed SORM-related work at facilities in at least 12 cities in Russia, according to the documents, which show how the network linked the surveillance system. In February 2017, a Nokia employee was sent to three cities south of Moscow to examine SORM, according to letters from a Nokia executive informing MTS employees of the trip.

Nokia worked with Malvin, a Russian firm that manufactured the SORM hardware the F.S.B. used. One Malvin document instructed Malvin’s partners to ensure that they had entered the correct parameters for operating SORM on switching hardware. It also reminded them to notify Malvin technicians of passwords, user names and IP addresses.

Malvin is one of several Russian companies that won lucrative contracts to make equipment to analyze and sort through telecommunications data. Some of those companies, including Malvin, were owned by a Russian holding company, Citadel, which was controlled by Alisher Usmanov. Mr. Usmanov, an oligarch with ties to Mr. Putin, is now the subject of sanctions in the United States, the European Union, Britain and Switzerland.

Malvin and Citadel did not respond to requests for comment.

Other Nokia documents specified which cables, routers and ports to use to connect to the surveillance system. Network maps showed how gear from other companies, including Cisco, plugged into the SORM boxes. Cisco declined to comment.

For Nokia engineers in Russia, the work related to SORM was often mundane. In 2017, a Nokia technician received an assignment to Orel, a city about 225 miles south of Moscow.

“Carry out work on the examination of SORM,” he was told.

Michael Schwirtz contributed reporting.

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Is America’s Economy Entering a New Normal?

The pandemic, and now the war in Ukraine, have altered how America’s economy functions. While economists have spent months waiting for conditions to return to normal, they are beginning to wonder what “normal” will mean.

Some of the changes are noticeable in everyday life: Work from home is more popular, burrito bowls and road trips cost more, and buying a car or a couch made overseas is harder.

But those are all symptoms of broader changes sweeping the economy — ones that could be a big deal for consumers, businesses and policymakers alike if they linger. Consumer demand has been hot for months now, workers are desperately wanted, wages are climbing at a rapid clip, and prices are rising at the fastest pace in four decades as vigorous buying clashes with roiled supply chains. Interest rates are expected to rise higher than they ever did in the 2010s as the Federal Reserve tries to rein in inflation.

History is full of big moments that have changed America’s economic trajectory: The Great Depression of the 1930s, the Great Inflation of the 1970s and the Great Recession of 2008 are examples. It’s too early to know for sure, but the changes happening today could prove to be the next one.

kept at it.

Now, Russia’s invasion of Ukraine threatens the global geopolitical order, yet another shock disrupting trade and the economic system.

For Washington policymakers, Wall Street investors and academic economists, the surprises have added up to an economic mystery with potentially far-reaching consequences. The economy had spent decades churning out slow and steady growth clouded by weak demand, interest rates that were chronically flirting with rock bottom and tepid inflation. Some are wondering if, after repeated shocks, that paradigm could change.

“For the last quarter century, we’ve had a perfect storm of disinflationary forces,” Jerome H. Powell, the Fed chair, said in response to a question during a public appearance this week, noting that the old regime had been disrupted by a pandemic, a large spending and monetary policy response and a war that was generating “untold” economic uncertainty. “As we come out the other side of that, the question is: What will be the nature of that economy?” he said.

began to raise interest rates this month in a bid to cool the economy down and temper high inflation, and Mr. Powell made clear this week that the central bank planned to keep lifting them — perhaps aggressively. After a year of unpleasant price surprises, he said, the Fed will set policy based on what is happening, not on an expected return to the old reality.

“No one is sitting around the Fed, or anywhere else that I know of, just waiting for the old regime to come back,” Mr. Powell said.

The prepandemic normal was one of chronically weak demand. The economy today faces the opposite issue: Demand has been supercharged, and the question is whether and when it will moderate.

Before, globalization had weighed down both pay and price increases, because production could be moved overseas if it grew expensive. Gaping inequality and an aging population both contributed to a buildup of savings stockpiles, and as money was held in safe assets rather than being put to more active use, it seemed to depress growth, inflation and interest rates across many advanced economies.

Japan had been stuck in the weak-inflation, slow-growth regime for decades, and the trend seemed to be spreading to Europe and the United States by the 2010s. Economists expected those trends to continue as populations aged and inequality persisted.

Then came the coronavirus. Governments around the world spent huge amounts of money to get workers and businesses through lockdowns — the United States spent about $5 trillion.

The era of deficient demand abruptly ended, at least temporarily. The money, which is still chugging out into the U.S. economy from consumer savings accounts and state and local coffers, helped to fuel strong buying, as families snapped up goods like lawn mowers and refrigerators. Global supply chains could not keep up.

were able to raise prices without losing customers, they did so. And as workers saw their grocery and Seamless bills swelling, airfares climbing and kitchen renovations costing more, they began to ask their employers for more money.

Companies were rehiring as the economy reopened from the pandemic and to meet the burst in consumption, so labor was in high demand. Workers began to win the raises they wanted, or to leave for new jobs and higher pay. Some businesses began to pass rising labor costs along to customers in the form of higher prices.

The world of slow growth, moderate wage gains and low prices evaporated — at least temporarily. The question now is whether things will settle back down to their prepandemic pattern.

The argument for a return to prepandemic norms is straightforward: Supply chains will eventually catch up. Shoppers have a lot of money in savings accounts, but those stockpiles will eventually run out, and higher Fed interest rates will further slow spending.

As demand moderates, the logic goes, forces like population aging and rampant inequality will plunge advanced economies back into what many economists call “secular stagnation,” a term coined to describe the economic malaise of the 1930s and revived by the Harvard economist Lawrence H. Summers in the 2010s.

Fed officials mostly think that reversion will happen. Their estimates suggest that low inflation and slow growth will be back within a few years, and that interest rates will not have to rise above 3 percent to achieve that moderation. Market pricing also suggests inflation will slow with time, albeit to higher levels than investors expected in 2018 and 2019.

But some of today’s trends look poised to linger, at least for a while. Job openings are plentiful, but the working-age population is growing glacially, immigration has slowed, and people are only gradually returning to work from the labor market’s sidelines. Labor shortages are fueling faster wage gains, which could sustain demand and enable companies to charge higher prices.

a recent essay.

Global forces could exacerbate those trends. The past year’s supply chain issues could inspire companies to produce more domestically — reversing years of globalization and chipping away at a force that had been holding down wage and price growth for decades. The transition to greener energy sources could bolster investment, pushing up interest rates and at least temporarily lifting costs.

“The long era of low inflation, suppressed volatility and easy financial conditions is ending,” Mark Carney, a former head of the Bank of England, said of the global economy in a speech on Tuesday. “It is being replaced by more challenging macro dynamics in which supply shocks are as important as demand shocks.”

Russia’s invasion of Ukraine, which has the potential to rework global trade relationships for years to come, could leave a more lasting mark on the economy than the pandemic did, Mr. Carney said.

“The pandemic marks a pivot,” he told reporters. “The bigger story is actually the war. That is crystallizing — reinforcing — a process of de-globalization that had begun.”

Mr. Summers said the current period of high inflation and repeated shocks to supply marked “a period rather than an era.” It is too soon to say if the world has fundamentally changed. Over the longer term, he puts the chances that the economy will settle back into its old regime at about 50-50.

“I don’t see how anyone can be confident that secular stagnation is durably over,” he said. On the other hand, “it is quite plausible that we would have more demand than we used to.”

That demand would be fueled by government military spending, spending on climate-related initiatives and spending driven by populist pressures, he said.

In any case, it could take years to know what the economy of the future will look like.

What is clear at this point? The pandemic, and now geopolitical upheaval, have taken the economy and shaken it up like a snow globe. The flakes will eventually fall — there will be a new equilibrium — but things may be arranged differently when everything settles.

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Will War Make Europe’s Switch to Clean Energy Even Harder?

At the Siemens Gamesa factory in Aalborg, Denmark, where the next generation of offshore wind turbines is being built, workers are on their hands and knees inside a shallow, canoe-shaped pod that stretches the length of a football field. It is a mold used to produce one half of a single propeller blade. Guided by laser markings, the crew is lining the sides with panels of balsa wood.

The gargantuan blades offer a glimpse of the energy future that Europe is racing toward with sudden urgency. The invasion of Ukraine by Russia — the European Union’s largest supplier of natural gas and oil — has spurred governments to accelerate plans to reduce their dependence on climate-changing fossil fuels. Armed conflict has prompted policymaking pledges that the more distant threat of an uninhabitable planet has not.

Smoothly managing Europe’s energy switch was always going to be difficult. Now, as economies stagger back from the second year of the pandemic, Russia’s attack on Ukraine grinds on and energy prices soar, the painful trade-offs have crystallized like never before.

Moving investments away from oil, gas and coal to sustainable sources like wind and solar, limiting and taxing carbon emissions, and building a new energy infrastructure to transmit electricity are crucial to weaning Europe off fossil fuels. But they are all likely to raise costs during the transition, an extremely difficult pill for the public and politicians to swallow.

unwinding efforts to shut coal mines and stop drilling new oil and gas wells to replace Russian fuel and bring prices down.

proposed a carbon tax on imports from carbon-producing sectors like steel and cement.

And it has led the way in generating wind power, especially from ocean-based turbines. Siemens Gamesa Renewable Energy, for example, has been instrumental in planting rows of colossal whirligigs at sea that can generate enough green energy to light up cities.

Europe, too, is on the verge of investing billions in hydrogen, potentially the multipurpose clean fuel of the future, which might be generated by wind turbines.

halted approval of Nord Stream 2, an $11 billion gas pipeline under the Baltic Sea that directly links Russia to northeastern Germany.

As Ursula von der Leyen, the European Commission president, said when she announced a plan on March 8 to make Europe independent of Russian fossil fuels: “We simply cannot rely on a supplier who explicitly threatens us.” The proposal calls for member nations to reduce Russian natural gas imports by two-thirds by next winter and to end them altogether by 2027 — a very tall order.

This week, European Union leaders are again meeting to discuss the next phase of proposals, but deep divisions remain over how to manage the current price increases amid anxieties that Europe could face a double whammy of inflation and recession.

On Monday, United Nations Secretary General António Guterres warned that intense focus on quickly replacing Russian oil could mean that major economies “neglect or kneecap policies to cut fossil fuel use.”

price of palladium, used in automotive exhaust systems and mobile phones, has been soaring amid fears that Russia, the world’s largest exporter of the metal, could be cut off from global markets. The price of nickel, another key Russian export, has also been rising.

Mr. Rasmussen and other executives added that identifying suitable areas for wind turbines and obtaining permits required for construction take “far too long.” Challenges are based on worries that the vast arrays of turbines will interfere with fishing, obstruct naval exercises and blight views from summer houses.

To Kadri Simson, Europe’s commissioner for energy, renewable energy projects should be treated as an “overriding public interest,” and Europe should consider changing laws to facilitate them.

“We cannot talk about a renewables revolution if getting a permit for a wind farm takes seven years,” Ms. Simson said.

Still, environmental regulations and other rules relating to large infrastructure installations are usually the province of countries rather than European Union officials in Brussels.

And steadfast opposition from communities and industries invested in fossil fuels make it hard for political leaders to fast-track energy transition policies.

In Upper Silesia, Poland’s coal basin, bright yellow buses display signs that boast they run on 100 percent electric, courtesy of a grant from the European Union. But along the road, large billboards mounted before the invasion of Ukraine by state-owned utilities — erroneously — blame Brussels for 60 percent of the rise in energy prices.

Down in the Wujek coal mine, veterans worry if their jobs will last long enough for them to log the 25 years needed to retire with a lifelong pension. Closing mines not only threatens to devastate the economy, several miners said, but also a way of life built on generations of coal mining.

“Pushing through the climate policy forcefully may lead to a drastic decrease in the standard of living here,” said Mr. Kolorz at Solidarity’s headquarters in Katowice. “And when people do not have something to put on the plate, they can turn to extreme populism.”

Climate pressures are pushing at least some governments to consider steps they might not have before.

German officials have determined that it is too costly to keep the country’s last three remaining nuclear power generators online past the end of the year. But the quest for energy with lower emissions is leading to a revival of nuclear energy elsewhere.

Britain and France say they plan to invest in smaller nuclear reactors that can be produced in larger numbers to bring down costs.

Britain might even build a series of small nuclear fusion reactors, a promising but still unproven technology. Ian Chapman, chief executive of the U.K. Atomic Energy Authority, said every route to clean energy must be tried if there is to be any hope of reaching net zero emissions in three decades, the deadline for avoiding catastrophic climate change. “We’ve got to do everything we possibly can,” he said.

In the short term, much of what the European Union is proposing involves switching the source of fossil fuels, and, in particular, natural gas, from Russia to other suppliers like the United States, Qatar and Azerbaijan, and filling up storage facilities as a buffer. The risk is that Europe’s actions will further raise prices, which are already about five times higher than a year ago, in a market where supplies are short in part because companies are wary of investing in a fuel that the world ultimately wants to phase out.

Over the longer term, Europe and Britain seem likely to accelerate their world-leading rollout in renewable energy and other efforts to cut emissions despite the enormous costs and intense disruptions.

“The E.U. will almost certainly throw hundreds of billions of euros at this,” said Henning Gloystein, a director for energy and climate at Eurasia Group, a political risk firm. “Once the trains have left the station, they can’t be reversed.”

Melissa Eddy contributed reporting.

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How Roman Abramovich Used Shell Companies and Wall Street Ties to Invest in the U.S.

In July 2012, a shell company registered in the British Virgin Islands wired $20 million to an investment vehicle in the Cayman Islands that was controlled by a large American hedge fund firm.

The wire transfer was the culmination of months of work by a small army of handlers and enablers in the United States, Europe and the Caribbean. It was a stealth operation intended, at least in part, to mask the source of the funds: Roman Abramovich.

For two decades, the Russian oligarch has relied on this circuitous investment strategy — deploying a string of shell companies, routing money through a small Austrian bank and tapping the connections of leading Wall Street firms — to quietly place billions of dollars with prominent U.S. hedge funds and private equity firms, according to people with knowledge of the transactions.

The key was that every lawyer, corporate director, hedge fund manager and investment adviser involved in the process could honestly say he or she wasn’t working directly for Mr. Abramovich. In some cases, participants weren’t even aware of whose money they were helping to manage.

asked Congress for more resources as it helps to oversee the Biden administration’s sanctions program along with a new Justice Department kleptocracy task force. And on Capitol Hill, lawmakers are pushing a bill, known as the Enablers Act, that would require investment advisers to identify and more carefully vet their customers.

Mr. Abramovich has an estimated fortune of $13 billion, derived in large part from his well-timed purchase of an oil company owned by the Russian government that he sold back to the state at a massive profit. This month, European and Canadian authorities imposed sanctions on him and froze his assets, which include the famed Chelsea Football Club in London. The United States has not placed sanctions on him.

a pair of luxury residences near Aspen, Colo. But he also invested large sums of money with financial institutions. His ties to Mr. Putin and the source of his wealth have long made him a controversial figure.

Many of Mr. Abramovich’s U.S. investments were facilitated by a small firm, Concord Management, which is led by Michael Matlin, according to people with knowledge of the transactions who were not authorized to speak publicly.

Mr. Matlin declined to comment beyond issuing a statement that described Concord as “a consulting firm that provides independent third-party research, due diligence and monitoring of investments.”

A spokeswoman for Mr. Abramovich didn’t respond to emails and text messages requesting comment.

Concord, founded in 1999, didn’t directly manage any of Mr. Abramovich’s money. It acted more like an investment adviser and due diligence firm, making recommendations to the directors of shell companies in Caribbean tax havens about potential investments in marquee American investment firms, according to people briefed on the matter.

Paycheck Protection Program loan worth $265,000 during the pandemic. (Concord repaid the loan, a spokesman said.)

Concord’s secrecy made some on Wall Street wary.

In 2015 and 2016, investigators at State Street, a financial services firm, filed “suspicious activity reports” alerting the U.S. government to transactions that Concord arranged involving some of Mr. Abramovich’s Caribbean shell companies, BuzzFeed News reported. State Street declined to comment.

American financial institutions are required to file such reports to help the U.S. government combat money laundering and other financial crimes, though the reports are not themselves evidence of any wrongdoing having been committed.

But for the most part, American financiers had no inkling about — or interest in discovering — the source of the money that Concord was directing. As long as routine background checks didn’t turn up red flags, it was fine.

Paulson & Company, the hedge fund run by John Paulson, received investments from a company that Concord represented, according to a person with knowledge of the investment. Mr. Paulson said in an email that he had “no knowledge” of Concord’s investors.

Concord also steered tens of millions of dollars from two shell companies to Highland Capital, a Texas hedge fund. Highland hired a unit of JPMorgan Chase, the nation’s largest bank, to ensure that the companies were legitimate and that the investments complied with anti-money-laundering rules, according to federal court records in an unrelated bankruptcy case.

“corporate governance services” to investment managers.

For $15,000 a year, plus other fees, HighWater would provide an employee to sit on the board of the financial vehicle that the fund manager was expected to launch to accept the wealthy family’s money, according to emails between the fund manager and a HighWater executive reviewed by The New York Times.

The fund manager also brought on Boris Onefater, who ran a small U.S. consulting firm, Constellation, as another board member. Mr. Onefater said in an interview that he couldn’t remember whose money the Cayman vehicle was managing. “You’re asking for ancient history,” he said. “I don’t recall Mr. Abramovich’s name coming up.”

The fund manager hired Mourant, an offshore law firm, to get the paperwork for the Cayman vehicle in order. The managing partner of Mourant did not respond to requests for comment.

He also hired GlobeOp Financial Services, which provides administration services to hedge funds, to ensure that the Cayman entity was complying with anti-money-laundering laws and wasn’t doing business with anyone who had been placed under U.S. government sanctions, according to a copy of the contract.

“We abide by all laws in all jurisdictions in which we do business,” said Emma Lowrey, a spokeswoman for SS&C Technologies, a financial technology company based in Windsor, Conn., that now owns GlobeOp.

John Lewis, a HighWater executive, said in an email to The Times that his firm received four referrals from Concord from 2011 to 2014 and hadn’t dealt with the firm since then.

“We were aware of no links to Russian money or Roman Abramovich,” Mr. Lewis said. He added that GlobeOp “did not identify anything unusual, high risk, or that there were any politically exposed persons with respect to any investors.”

The Cayman fund opened for business in July 2012 when $20 million arrived by wire transfer. The expectation was that tens of millions more would follow, although additional funds never showed up. The Cayman fund was run as an independent entity, using the same investment strategy — buying and selling exchange-traded funds — employed by the fund manager’s main U.S. hedge fund.

The $20 million was wired from an entity called Caythorpe Holdings, which was registered in the British Virgin Islands.

Documents accompanying the wire transfer showed that the money originated with Kathrein Privatbank in Vienna. It arrived in Grand Cayman after passing through another Austrian bank, Raiffeisen, and then JPMorgan. (JPMorgan was serving as a correspondent bank, essentially acting as an intermediary for banks with smaller international networks.)

A spokesman for Kathrein declined to comment. A spokeswoman for JPMorgan declined to comment. Representatives for Raiffeisen did not respond to requests for comment.

The fund manager noticed that some of the documentation was signed by a lawyer named Natalia Bychenkova. The Russian-sounding name led him to conclude that he was probably managing money for a Russian oligarch. But the fund manager wasn’t bothered, since GlobeOp had verified that Caythorpe was compliant with know-your-customer and anti-money-laundering rules and laws.

He didn’t know who controlled Caythorpe, and he didn’t ask.

In early 2014, after Russia invaded the Ukrainian region of Crimea, markets tanked. The fund manager made a bearish bet on the direction of the stock market, and his fund got crushed when stocks rallied.

The next year, Caythorpe withdrew its money from the Cayman fund. Caythorpe was liquidated in 2017.

The fund manager said he didn’t realize until this month that he had been investing money for Mr. Abramovich.

Susan C. Beachy and Kitty Bennett contributed research. Maureen Farrell contributed reporting.

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