The Art Market at Times of Global Uncertainty


June 1, 2022

We live in uncertain times: the world is emerging from the main effects of the Covid-19 pandemic but is affected now by the Ukrainian war, rising inflation, slower growth and the more structural problems of inequality and climate change. Art can be a solace of aesthetic enjoyment in difficult times. At the same time artwork can be an investment vehicle guided by the expectation of a monetary return, ideally an edge against financial instability. These two dimensions (aesthetics and money) can be in conflict or reinforce each other.

A high volume of liquidity circulating worldwide is being channeled to acquire high-value art, pushing art prices up in a segmented art market. Wealth-inequality, in turn, has led to the segmentation and duality of the art market: nearly 65 percent of global art sales is conducted at the upper-end of the market (defined as places that sell artwork each worth more than one million US dollars), although this amounts to only around one percent of the total traded volume. This sector is formed by big international galleries and large auction houses. In contrast, the segment of medium and small size galleries, which leads to nearly 80 percent of employment creation and involves 99 percent of traded volume, accounts for only 35 percent of the value of global art sales.

Investing in art also has a dark side. In recent years the art market has registered global annual transactions of between US dollars 60-70 billion. Some individuals take advantage of the unregulated nature of the art market to use it as a vehicle for money laundering and tax-avoidance. At the same time, there is an active market for stolen, forged, and faked artwork whose annual sales are estimated to range from US dollars 6 to10 billion.

Art prices can reach extravagant levels. On May 9, 2022, a piece by Andy Warhol sold at Christie’s for a stunning 195 million US dollars. On March 11, 2021, a digital collage named Everydays: the first 5,000 days by the digital artist Mike Winkelmann (aka Beeple) sold at Christie’s for US dollars 69.346 million. Early in 2017, a Leonardo Da Vinci painting titled Salvatore Mundi was sold in New York’s Christie’s for US dollars 450 million, the highest recorded price ever paid for a work of art (in this case for a dead artist).

The art market is complex as it is subject to physical indivisibilities, asymmetric information, and significant transaction costs. That makes it a fascinating topic for economists, art scholars and financial analysts. At the global level, sales are concentrated in three main national art markets: the USA, China, and the UK, which together account for more than 80 percent of global art sales, followed by France, Switzerland, and Germany. As discussed in chapter 3 of my book, the rise of the Chinese art market in the last two decades has been impressive, reflecting a changing economic geography with new centers of economic, geopolitical and artistic power.

Macroeconomic cycles and crises also affect the art market, although their impact varies. Average art price indices have behaved in a pro-cyclical way during the four main recessions of the last 90 years: the great depression of the 1930s, the stagflation of the 1970s, the global financial crisis in 2008-09, and the Covid -19 crisis. Nonetheless, prices of top artists generally do not fall in periods of economic downturn, disarray, and crises. Like gold, high-value artwork can be a counter-cyclical asset that is not correlated with the ups and downs of the overall economy.
New technologies and financial products are having an impact on the art market. Sales are increasingly conducted on-line, and financial techniques of collateralization and securitization are being used in art trade. In turn, “Non-Fungible Tokens” (encrypted units) provide a way out of the perennial problems of authentication in a market where forgery, theft and faking are common practices.

The contribution of art to beauty, wellbeing and financial protection must not be downplayed. A lesson of current and past turbulence episodes is that art (and culture in general) must be preserved and promoted. We need adequate public funding of museums, supporting emerging talents, art cooperatives and the teaching of art to children at schools and the youth in universities. A certain de-commodification/de-privatization of the art sector is probably needed to reduce the excessive influence of the profit motive in the setting of cultural priorities.


The author holds a Ph. D in Economics from MIT. He is the Chairman of the Chilean chapter of the 1818 Society and President of the International Center for Globalization and Development ( The article draws on his recent book: The Evolution of Contemporary Arts Markets. Aesthetics, Money and Turbulence, Routledge UK, 2021.

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