Systemic Fault Lines in the American Order: Yacine Merzougui Defends a Dissertation Warning of a Global Crisis (2026–2030)

Systemic Fault Lines in the American Order: Yacine Merzougui Defends a Dissertation Warning of a Global Crisis (2026–2030)

Algiers – December 2025 – Researcher Yacine Merzougui has defended a doctoral dissertation entitled “Systemic Vulnerabilities of the United States and the Risk of a Global Crisis (2026–2030)”, presenting a rigorous and forward-looking analysis of the structural weaknesses embedded within the contemporary American economic and institutional model and their potential to trigger a global systemic shock within the coming decade.

Positioned at the intersection of international economics, public finance, and geo-economic geopolitics, the dissertation advances a unified analytical framework that departs decisively from fragmented conventional approaches. Rather than examining public debt, monetary policy, protectionism, or political polarization in isolation, Merzougui’s work integrates these dimensions into a single systemic architecture, emphasizing interaction effects, feedback loops, and cumulative fragilities within the US-led global order.

The study situates its analysis within the historical architecture established after the Bretton Woods Conference of 1944, when the United States emerged as the central pillar of the international monetary and financial system. It recalls how the dollar’s reserve-currency status, the dominance of US financial markets, the safe-haven role of Treasury securities, and Washington’s capacity to finance persistent fiscal and trade deficits collectively underpinned what Valéry Giscard d’Estaing famously termed the dollar’s “exorbitant privilege.” According to the dissertation, this configuration ensured global stability for decades, but it also concealed long-term structural imbalances that would gradually intensify.

Merzougui identifies the 2008–2009 global financial crisis as a decisive rupture. Public debt dynamics deteriorated sharply, unconventional monetary policies became structural rather than exceptional, and the Federal Reserve’s balance sheet expanded to unprecedented levels. These developments were compounded by the COVID-19 shock and by escalating geo-economic tensions, particularly the intensification of US–China rivalry marked by trade wars, technological sanctions, and a sharp rise in protectionist tariffs. The dissertation argues that these factors collectively weakened the internal coherence of the American economic model while amplifying global instability.

A central contribution of the research lies in its diagnosis of the current situation as one of “systemic convergence of vulnerabilities.” By 2024, the United States had crossed multiple historical warning thresholds simultaneously. Public debt exceeded 130% of GDP, debt-servicing costs surpassed critical levels, equity markets displayed speculative characteristics consistent with late-stage bubbles, political polarization reached levels historically associated with institutional paralysis, and the share of financially fragile economic units approached what Minsky defined as the danger zone. Merzougui stresses that such a configuration is virtually unprecedented outside periods of major global conflict, placing the US system in a zone of extreme fragility.

The dissertation’s central research question examines whether the interaction between unsustainable debt dynamics, escalating geo-economic tensions, and internal institutional fragmentation could generate a global systemic crisis between 2026 and 2030, and through which transmission mechanisms such a crisis might unfold. To address this question, the author formulates five empirically testable hypotheses relating to debt thresholds, protectionism-induced inflation, political polarization and policy failure, the gradual erosion of the dollar’s dominance, and the likelihood of a major financial market correction.

Methodologically, the work stands out for its integrated mixed-methods design. It combines long-run quantitative analysis based on macroeconomic time series from 1945 to 2025 with advanced econometric modeling, including vector autoregressions, cointegration tests, stress-testing frameworks, and Monte Carlo simulations calibrated to historical crises. This quantitative backbone is complemented by an in-depth qualitative analysis of institutional documents and comparative historical case studies spanning the Great Depression, the stagflationary crisis of the 1970s, and the 2008 global financial meltdown.

Looking ahead, Merzougui develops probabilistic scenarios for the 2026–2030 period, ranging from relative stability to high instability and a full systemic crisis. These scenarios are embedded within a network-based contagion model that conceptualizes the global financial system as an interconnected structure, capable of transmitting shocks originating in the United States across regions and markets.

In its conclusion, the dissertation asserts that the risk of a major global rupture during the 2026–2030 horizon can no longer be dismissed as a theoretical abstraction. Instead, it emerges as a plausible outcome of cumulative structural imbalances, policy constraints, and geopolitical shifts. By transcending disciplinary silos and grounding its claims in rigorous empirical testing, the study offers an original and scientifically robust contribution to the understanding of contemporary global instability.

𝓣𝓻𝓪𝓷𝓼𝓵𝓪𝓽𝓲𝓸𝓷 𝓸𝓯 𝓽𝓱𝓮 𝓓𝓲𝓼𝓼𝓮𝓻𝓽𝓪𝓽𝓲𝓸𝓷 𝓐𝓫𝓼𝓽𝓻𝓪𝓬𝓽: 𝓢𝔂𝓼𝓽𝓮𝓶𝓲𝓬 𝓥𝓾𝓵𝓷𝓮𝓻𝓪𝓫𝓲𝓵𝓲𝓽𝓲𝓮𝓼 𝓸𝓯 𝓽𝓱𝓮 𝓤𝓷𝓲𝓽𝓮𝓭 𝓢𝓽𝓪𝓽𝓮𝓼 𝓪𝓷𝓭 𝓽𝓱𝓮 𝓡𝓲𝓼𝓴 𝓸𝓯 𝓪 𝓖𝓵𝓸𝓫𝓪𝓵 𝓒𝓻𝓲𝓼𝓲𝓼 (2026–2030)

 

General Introduction

This dissertation lies at the intersection of three academic disciplines: international economics, public finance, and geo-economic geopolitics. It provides a systematic analysis of the structural vulnerabilities of the United States within the context of the ongoing reconfiguration of the global economic order. Its central objective is to assess the probability and mechanisms through which a major systemic crisis could emerge during the 2026–2030 period, by explicitly linking three dimensions that are usually examined in isolation: public debt sustainability, geo-economic tensions, and internal institutional fragmentation.

 

The adopted approach is both integrated and forward-looking. In contrast to conventional analyses that treat debt dynamics or protectionism separately, this research develops a unified analytical framework capable of capturing the interactions and feedback loops between macro-financial, geopolitical, and institutional dimensions.

 

General Context: A Global System under Structural Strain

The Post-War Monetary and Financial Architecture (1945–2008)
Since the Bretton Woods Conference in July 1944, the global economy has been structured around a monetary and financial architecture dominated by the United States. This configuration—famously described by Valéry Giscard d’Estaing in 1965 as the dollar’s “exorbitant privilege”—rests on four fundamental pillars.

 

First, monetary dominance: the US dollar remains the world’s primary reserve currency. In 2024, it accounted for 58.9% of global foreign exchange reserves (IMF, Q2 2024), compared with 20.5% for the euro, 5.7% for the yuan, and 4.9% for the Japanese yen.

Second, financial dominance: US financial markets—equities, bonds, and derivatives—concentrate the bulk of global liquidity. By the end of 2024, US market capitalization represented 45% of the global total, approximately USD 70 trillion out of USD 155 trillion.

Third, the safe-haven role: US federal debt constitutes the backbone of the international financial system, with US Treasury securities widely used as collateral in global financial transactions.
Fourth, the capacity for virtually unlimited financing: the United States has been able to sustain twin deficits—fiscal and trade—without triggering a balance-of-payments crisis, owing to the structurally global demand for dollar-denominated assets.

 

Post-2008 Fractures: Financial Crisis and Structural Shifts

The 2008–2009 financial crisis marked a decisive turning point in the dynamics of the US-led system. For the first time since the 1930s, the viability of the American economic model was openly questioned.

 

Public debt expanded sharply, with the debt-to-GDP ratio rising from 67% in 2008 to 106% in 2013—an increase of 39 percentage points in just five years. This trajectory intensified during the COVID-19 pandemic, reaching 128% in 2020 and 133% in 2024.

At the same time, unconventional monetary policies became the norm. The Federal Reserve’s balance sheet expanded from USD 900 billion in 2007 to USD 9 trillion in 2022, representing a tenfold increase over fifteen years.

Geo-political tensions also escalated, particularly following the intensification of US–China rivalry after 2018, marked by trade wars and technological sanctions. Average US tariff rates rose from 3.1% in 2017 to 19.3% in 2024.

 

The Current Situation (2024): Convergence of Vulnerabilities

By 2024, several indicators of systemic fragility converged simultaneously toward levels historically associated with major crises. The public debt-to-GDP ratio reached 133%, surpassing the warning threshold of 130%. Debt servicing costs amounted to 3.2% of GDP, exceeding the critical level of 3.0%. The Shiller price-to-earnings (CAPE) ratio stood at 32.4, well above the speculative bubble threshold of 30. Political polarization reached 0.79 on standardized indices, crossing the critical value of 0.75. The share of Ponzi units, following Minsky’s framework, reached 0.42, approaching the danger zone of 0.50. Meanwhile, the Federal Reserve’s balance sheet amounted to 29% of GDP, compared with a long-term historical average of around 20%.

 

From a critical standpoint, six of the seven key indicators exceed historical warning thresholds. Such a state of “systemic convergence” is unprecedented outside periods of world war, suggesting that the US system has entered a zone of extreme fragility.

 

Research Problem and Positioning

Central Research Question

To what extent can the dynamics of US public debt, combined with escalating geo-economic tensions and internal institutional fragmentation, generate a global systemic crisis between 2026 and 2030, and through which financial, political, and institutional transmission mechanisms?

 

This question encompasses five interrelated analytical dimensions: the macro-financial dimension, focusing on debt sustainability, interest rate–growth dynamics, and banking system vulnerabilities; the geo-economic dimension, examining the inflationary and supply-chain effects of protectionism and US–China competition; the institutional dimension, analyzing domestic political polarization and its impact on policy-making capacity; the international monetary dimension, addressing the gradual erosion of the dollar’s reserve-currency status; and the contagion dimension, exploring the mechanisms through which a US-centered crisis could propagate globally.

 

Research Hypotheses

The argument rests on five principal, empirically testable hypotheses. The first posits a systemic debt threshold, whereby US debt has surpassed a critical level—exceeding 130% of GDP—rendering the system vulnerable to interest-rate shocks or a contraction in global demand. The second hypothesis asserts that US protectionism amplifies inflationary pressures and weakens global value chains. The third contends that internal political polarization, once exceeding a critical threshold, undermines the federal government’s capacity to respond effectively, increasing the likelihood of policy errors. The fourth hypothesis argues that the international monetary system has entered a transition phase characterized by gradual diversification away from the dollar. The fifth maintains that financial markets are in the terminal phase of a speculative bubble, making a sharp correction likely during the 2026–2030 period.

 

Methodology: An Integrated Mixed-Methods Approach

 

This dissertation adopts a rigorously mixed methodology, combining quantitative precision with in-depth qualitative analysis.

 

The quantitative component relies on long-run macroeconomic time series covering 1945–2025, sourced from authoritative institutions such as the Federal Reserve, the Congressional Budget Office, the International Monetary Fund, and the Bank for International Settlements. Multivariate Vector Autoregression (VAR) models are estimated to capture dynamic interactions among macroeconomic variables, with impulse response functions measuring the effects of shocks such as a 100-basis-point increase in interest rates. Long-term relationships are tested using Johansen cointegration techniques applied to systems linking debt-to-GDP ratios, interest rates, and growth. Macro-financial stress tests are developed by calibrating scenarios to historical crises—1929, 1973, and 2008—and applying them to current conditions through Monte Carlo simulations with 10,000 iterations.

 

The qualitative analysis is based on systematic reviews of institutional documents issued by the Federal Reserve, the Congressional Budget Office, the IMF, the BIS, and the OECD, complemented by comparative historical case studies of three systemic crises: the Great Depression, the oil shock and stagflation of the 1970s, and the global financial crisis of 2008–2009.

 

Forward-Looking Methodology

A probabilistic scenario-building approach distinguishes three possible trajectories for 2026–2030: relative stability, high instability, and a full systemic crisis. Probabilities are estimated using a multivariate probit model calibrated on historical data from 1945 to 2024. Crisis contagion mechanisms are modeled through network analysis, representing the global financial system as a graph in which nodes correspond to countries and edges to financial exposure links.

 

Structure of the Dissertation

The argument is developed across five complementary parts. The first establishes the theoretical and historical foundations, reviewing crisis models and relevant literature. The second dissects US public debt dynamics from 1945 to 2025, including sustainability tests and projections to 2035. The third examines protectionism, inflation, and financial instability, with particular attention to banking vulnerabilities and global value chains. The fourth develops forward-looking scenarios for 2026–2030, incorporating systemic stress tests and sensitivity analyses. The fifth addresses the geopolitical dimension of US decline, focusing on hegemonic cycles, the erosion of reserve-currency status, and US–China rivalry.

 

Conclusion

This dissertation offers an original contribution to the understanding of contemporary systemic dynamics and the risk of a major global rupture during the 2026–2030 period. Three key findings emerge. First, the current US configuration exhibits an unprecedented convergence of vulnerabilities, with six of seven major indicators exceeding historical warning thresholds. Second, the integrated methodological approach transcends traditional disciplinary boundaries, unifying debt economics, financial crisis theory, and geo-economic geopolitics into a single analytical framework capable of capturing complex feedback mechanisms. Third, the five research hypotheses constitute a coherent and empirically testable structure, each formulated with mathematical precision and subject to econometric validation, thereby ensuring the scientific rigor of the study’s conclusions.