Podcast Summary: The Indicator from Planet Money

Episode: Are we in an economic 'doom loop'?

Date: February 9, 2026
Hosts: Darian Woods & Adrienne Ma
Guest: Eswar Prasad, Professor of Economics and Trade Policy at Cornell University

Overview

This episode examines the concept of an economic “doom loop”—a negative feedback cycle fueled by economic conditions, politics, and global institutions. The hosts discuss with Eswar Prasad why factors that were supposed to foster stability and prosperity—globalization, international institutions, and technology—are now driving greater disorder and instability. Prasad also shares thoughts on what it will take to escape such a cycle.

Key Discussion Points & Insights

1. Introduction: The Economic Mood

• [00:11] Adrienne Ma opens the episode noting the “bad” feeling about the global economy, referencing prevalent news about financial panics, trade wars, and industry collapses.
• [00:27] Darian Woods jokes about their own coverage being slightly cheerier, referencing their earlier sentiment analysis.

2. Eswar Prasad and the "Doom Loop"

• [00:39] Introduction of Eswar Prasad, an initially optimistic economist whose book turned more pessimistic after research.
• [01:00] Eswar Prasad:

  “One could argue, and I was going to argue, that we're just in a transitional period where there is a lot of volatility, but everything is going to settle down.”

• [01:17] Eswar Prasad:

  “My heart was pulling me in one direction, which was the optimistic thesis, and my head was pulling me in the completely different direction.”

• Prasad’s new book, Doom: Why the World Economic Order is Spiraling into Disorder, is highlighted.
• [01:47] Adrienne Ma: outlines the theme: forces meant for good are driving instability and what it might take to break the cycle.

3. Explaining the "Doom Loop"

• [03:00] Darian Woods: Defines the doom loop as a cycle where “economic conditions, domestic politics, and international geopolitics feed off each other in a negative way.”
• Three focus areas:
  • Globalization
  • Institutions
  • Technology

4. Globalization’s Dark Side

• [03:33] Darian Woods: Describes globalization’s positives—cheaper goods, reduced poverty—but emphasizes uneven benefit distribution.
• [03:45] Eswar Prasad:

  “These benefits were not very evenly distributed…there was a sense that the economic and political elite were walking away with many of the benefits of globalization and they were able to capture the political system.”

• This dissatisfaction fuels “politics of resentment.”
• [04:21] Eswar Prasad:

  “…politicians who claim to be populist…are able to say that the problems that people are facing are because of the other,” referencing figures like Bolsonaro, Orban, Trump.

• [04:44] Eswar Prasad:

  “This politics of resentment in the hands of skillful politicians can be a very powerful force. It doesn't necessarily end up making common people better off, but it gives people the sense that they have to blow up the system in order for any change.”

5. Erosion of International Institutions

• [05:08] Darian Woods: Discusses institutions like the UN, World Bank, IMF.
• [05:23] Eswar Prasad:

  “…the United States, because of the doom loop dynamics, is beginning to walk away from some of these institutions…At the same time, the emerging market countries like China and India feel … the World Bank are really only protecting the interests of the richer countries…So…many of these emerging market countries, led by China, have started setting up their own institutions.”

• [06:11] Adrienne Ma: Jokes, “China was like, we don’t like your little club’s rules, so we’re gonna start our own club.”
• New parallel institutions: Asian Infrastructure Investment Bank, New Development Bank.
• [06:24] Eswar Prasad:

  “Now rather than having a common set of rules that everybody can agree upon, we have fragmentation. And that is the recipe for instability rather than stability.”

• [06:43] Eswar Prasad:

  “Trade used to be seen not just as a bridge between countries…Persistent instability is going to mean much more strife within countries, but also between countries.”

6. Technology: Promise and Peril

• [07:08] Eswar Prasad:

  “…technology was going to be the answer to everything. …I’m a technology optimist…But technology has a dark side.”

• Focus on AI, digital currencies, and social media:
  • Digital currencies (e.g., stablecoins) may destabilize small country currencies.
    • [07:37] Eswar Prasad:

      “…currencies [of small countries] could basically vanish because of this direct competition."

  • AI could exacerbate wealth inequality.
    • [07:59] Eswar Prasad:

      “We are seeing that AI is leading to…some very wealthy people getting much wealthier. And it’s not clear how broadly these benefits are going to be shared…”

7. Is There a Way Out?

• [08:22] Adrienne Ma: Asks about solutions.
• [08:29] Eswar Prasad:

  “There is a way out. …It’s going to take a combination of all of us as citizens…recognizing that a better future requires one of shared prosperity among all of us…leaders at all levels…who can help us see beyond our short term interests and prejudices. And we need better institutions.”

• [09:06] Adrienne Ma: Notes that “it does sound like a very tall order…do you really believe that all that can happen?”
• [09:12] Eswar Prasad:

  “That is my fervent hope for us and also the future generations to come. We really need to work to change this reality. But man, it’s going to be a hard slog to get back to a better world.”

Notable Quotes & Memorable Moments

• “One could argue…we're just in a transitional period where there is a lot of volatility, but everything is going to settle down.” – Eswar Prasad [01:00]
• “…my heart was pulling me in one direction…the optimistic thesis, and my head was pulling me in the completely different direction.” – Eswar Prasad [01:17]
• “…created a class of disaffected people within countries…a sense that the economic and political elite were walking away with many of the benefits of globalization…” – Eswar Prasad [03:45]
• “This politics of resentment in the hands of skillful politicians can be a very powerful force. It doesn't necessarily end up making common people better off, but it gives people the sense that they have to blow up the system in order for any change.” – Eswar Prasad [04:44]
• “Rather than having a common set of rules that everybody can agree upon, we have fragmentation. And that is the recipe for instability rather than stability.” – Eswar Prasad [06:24]
• “Technology has a dark side.” – Eswar Prasad [07:08]
• “We need better institutions.” – Eswar Prasad [08:29]
• “We really need to work to change this reality. But man, it’s going to be a hard slog to get back to a better world.” – Eswar Prasad [09:12]

Important Timestamps

• 00:11 – Global economic mood and media pessimism
• 01:00 – Eswar Prasad’s initial optimism and process writing his book
• 03:00 – Defining the "doom loop"
• 03:33 – Globalization’s downsides and the politics of resentment
• 05:08 – Fragmentation of international institutions
• 07:08 – Technology’s dual impact: progress and peril
• 08:29 – Search for hope and prescription for a way out

Tone & Takeaways

The conversation maintains the signature friendly, occasionally playful tone of The Indicator even as the subject matter turns sobering. Eswar Prasad’s analysis is clear-eyed but not entirely devoid of hope; he emphasizes both the magnitude and urgency of the challenge, and the need for collective, institutional, and leadership change to escape the doom loop.

This episode offers a succinct, accessible primer into how interlinked economic, political, and technological trends drive instability—and what it might take to restore global order.