The new abnormal state of the global economy is here to stay

Countries around the world should get used to pattern of unfamiliar inflation, growth, monetary policies and asset prices

Since the beginning of the year, the world economy has faced a new bout of severe financial market volatility, marked by sharply falling prices for equities and other risky assets. A variety of factors are at work: concerns about a hard landing for the Chinese economy, worries that US growth is faltering at a time when the Federal Reserve has begun raising interest rates, fears of escalating Saudi-Iranian conflict and signs - most notably plummeting oil and commodity prices - of severe weakness in global demand.

And there's more. The fall in oil prices, together with a lack of market liquidity, the rise in the leverage of US energy companies and that of energy firms and fragile sovereigns in oil-exporting economies, is stoking fears of serious credit events and a systemic crisis in credit markets. And then there are the seemingly neverending worries about Europe, with a British exit from the European Union becoming more likely, while populist parties of the right and the left gain ground across the continent.

Related: Is stagnation the 'new normal' for the world economy?