What does the future hold for the global economy? As it stands, the most likely answer, unfortunately, is lower growth, worsening inequality, distorted markets, and rising financial risks. But this outcome is not preordained. With timely changes to the policy paradigm, policymakers can lay the groundwork for a more dynamic, inclusive, and resilient economy.

The economic damage wrought by the Covid-19 crisis in the second quarter of 2020 was even worse than expected - economic activity plummeted, inequality rose, and elevated financial markets decoupled even more from economic reality. A...