What will happen if the AI bubble bursts? It would be one of the most predicted financial implosions in history: given technology companies’ stratospheric share prices, some kind of stockmarket correction is widely expected. But less thought has been given to what it would mean in practice and to what the wider economic implications might be. Our cover story this week in most of the world aims to fill that gap. We argue that an ensuing recession need not be deep, but it would be unusual. It would further weaken America’s economic hegemony, increase pressure on indebted governments and sharpen protectionist urges as weaker demand in America diverted even more Chinese exports elsewhere.

Whether AI will prompt a boom, bust or backlash in the coming months is one of the big questions hanging over 2026. But it is far from the only one. Donald Trump has undermined the rules-based international order, but what will take its place? Can liberal democracy withstand the challenge from the populist right? Will the trade war cause a global slowdown? Is a bond-market crisis looming as rich-world governments continue to spend beyond their means? The year is shaping up to be one in which answers to many of these questions start to emerge—and we explore these themes in The World Ahead 2026, our annual future-gazing annual, which is published with this week’s issue.

It’s the 40th edition of our annual, which we start putting together every May. As its editor, I am happy to see it out in the world at last. And its contents are not all doom and gloom: there is also some more light-hearted speculation about the coming year. What lessons can Odysseus offer in these storm-tossed times? What do Labubu dolls reveal about Chinese soft power? What can you expect from the next generation of weight-loss drugs? Has the world reached “peak wine”? We have guest essays from Mark Carney, prime minister of Canada, and Kaja Kallas, the European Union’s foreign-policy chief, among others. What happens in the next year could, in many ways, determine the course of the next decade. For more on all of this, watch this week’s edition of The Insider, in which I joined other editors to discuss the prospects for the coming year.

Our cover in Asia analyses the hidden risks in Taiwan’s boom. The island is envied for its manufacturing and exporting prowess, in chipmaking in particular. Taiwan’s rise, and its astonishing current-account surplus (now at 16% of GDP, compared with a mere 3% for China), have been supported by its long-standing policy of keeping its currency weak. But while this has helped exporters, it makes imports more expensive and has deprived Taiwanese consumers of the fruits of growth. It is also storing up growing financial risks. We argue that it is time for Taiwan to update its economic model and loosen its grip on its currency.