Commentary: How Governments Must Intervene to Shield the Vulnerable

The concept of a K-shaped economy emerged after the Covid-19 pandemic to describe an uneven recovery. Today, fueled by persistently high interest rates, sticky inflation and the AI revolution, this divergence has magnified into a defining global feature.

The K-shape manifests differently across the world. In China, the divide is structural, driven by the transition from old to new economic engines. In the U.S., the divergence is largely demographic: an AI boom is enriching the capital markets and high-income earners, while the middle and lower classes are squeezed by high inflation and borrowing costs.