Major Shocks Now Expected Every One to Two Years
Australia has entered a structurally different economic era characterized by frequent global disruptions, according to Luke Yeaman, chief economist at Commonwealth Bank. In a recent assessment published on Aug. 31, 2026, Yeaman stated that major economic shocks are now expected to occur every one to two years, marking a departure from the stability of previous decades.
Yeaman described the current landscape as "fundamentally new and different." He argued that the environment is now more dangerous and complex than in the past. The economist emphasized that uncertainty and volatility have become standard features of the global economy rather than temporary anomalies.
This shift implies that households and markets must adapt to a baseline level of instability that was previously uncommon. Yeaman’s warning highlights a structural change in how economic risks are distributed over time, suggesting that periodic major disruptions should be anticipated as a regular occurrence.
Four Forces Reshaping the Global Economy
Yeaman identified four primary forces currently reshaping the economic environment. These factors are working in tandem to increase instability across markets and households. The economist noted that it is the combined weight of these forces, rather than any single one acting alone, that is driving the current level of volatility.
Geopolitical Competition and Supply Chains
The first major force is shifting geopolitical competition. Yeaman pointed specifically to the strategic competition between the United States and China as a key driver of risk. This rivalry is impacting supply chains and contributing to a reversal of globalization trends. The fragmentation of global trade routes and economic alliances has introduced new layers of complexity for businesses and policymakers.
The Rise of Artificial Intelligence
The second force is the rapid rise of artificial intelligence (AI). Yeaman stated that the effects of AI are likely to surpass those of the dot-com era. He indicated that the largest impacts of this technological shift have yet to come, suggesting that significant economic adjustments are still ahead. The potential for AI to disrupt labor markets, productivity metrics, and industry structures adds another layer of uncertainty to long-term economic planning.
Energy Volatility From Net Zero Transition
The third force is the global transition to net zero emissions. According to Yeaman, this transition is already causing volatility in energy markets. The shift away from traditional energy sources requires rapid adaptation across industries. This structural change in how energy is produced and consumed creates fluctuations that affect both prices and supply reliability.
Rapidly Changing Demographics
The fourth force involves rapidly changing demographics. Shifts in population structures, including aging populations in some regions and growth in others, alter labor supplies, consumption patterns, and fiscal pressures. These demographic changes interact with the other three forces to complicate economic forecasting and policy responses.
Implications for Markets and Households
The convergence of these four forces creates a more dangerous and complex economic era. Yeaman’s assessment suggests that traditional models of stability may no longer apply. The expectation of shocks every one to two years means that resilience and adaptability are becoming critical for both financial institutions and individual households.
Yeaman argued strongly that this new era requires a fundamental rethinking of economic strategies. The interplay between geopolitical tensions, technological disruption, energy transitions, and demographic shifts creates a volatile environment where outcomes are less predictable than in previous decades.
The economist’s warning serves as a caution to investors and policymakers to prepare for continued instability. By identifying these specific drivers, Yeaman provides a framework for understanding the sources of current economic turbulence. The emphasis on the combined weight of these forces underscores that no single policy or market adjustment can fully mitigate the risks associated with this new normal.
As global markets continue to navigate this complex landscape, the frequency and impact of economic shocks will likely remain elevated. Yeaman’s analysis provides a clear indication that the era of relative stability has ended, replaced by one where volatility is an inherent characteristic of the global economic system.