Not Just Another Recession
Article

Not Just Another Recession

Why the Global Economy May Never Be the Same

Mohamed A. El-Erian
Foreign Affairs, 2022
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Protectionism, high inflation, poorly timed monetary policy and fiscal excess have left the global economy in a sorry state, says economist and former investment chief Mohamed A. El-Erian. He deftly argues that these are not simply transient events but ground-shifting transformations that will affect the future of governments, businesses and individuals. Executives and entrepreneurs will appreciate El-Erian’s no-nonsense call to change how society manages a new geopolitical and socioeconomic landscape.

Summary

Economic dislocations have roiled the global economy in the 2020s.

Geopolitical turmoil, supply-chain reshufflings, soaring inflation and high interest rates have rattled the global economy since its 2021 emergence from the COVID-19 pandemic lockdowns. The US Federal Reserve initially characterized these developments as transitory events in a typical business cycle. Officials stood back to allow isolated price spikes to work themselves out while continuing to stimulate economic demand. But they were wrong. Their responses ignited the worst inflation in a half-century, prompting higher interest rates.

These exogenous shocks will likely persist, cutting across socioeconomic and geopolitical...

About the Author

Mohamed El-Erian, former CEO and of co-chief investment officer of PIMCO, is president of Queens’ College, Cambridge, and chief economic adviser to Allianz.

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