RT.com
28 Nov 2022, 11:43 GMT+10
The coming recession will lead to a profound structural shift, Mohamed El-Erian says
There's a tendency to see economic challenges as temporary and quickly reversible, but this time the world is headed for a profound economic and financial shift rather than just another recession, Mohamed El-Erian has warned.
El-Erian is the chief economic adviser at Allianz, and former CEO of the influential bond market player PIMCO.
The economist wrote in a commentary for Foreign Affairs magazine that a combination of pressures on supply, central bank tightening, and market "fragility" were all likely to weigh on growth.
"Three new trends in particular hint at such a transformation and are likely to play an important role in shaping economic outcomes over the next few years: the shift from insufficient demand to insufficient supply as a major multi-year drag on growth, the end of boundless liquidity from central banks, and the increasing fragility of financial markets," El-Erian wrote.
"These shifts help explain many of the unusual economic developments of the last few years, and they are likely to drive even more uncertainty in the future as shocks grow more frequent and more violent," he believes.
The changes will affect individuals, companies, and governments - economically, socially, and politically, the economist warned.
El-Erian criticized the US Federal Reserve in particular for being too slow to recognize inflation's destructive impact on the economy, and then for its steep rate hikes to make up for lost time.
He also said that markets have been trained to expect easy money from central banks, and the "perverse effect" of that has been for "a significant chunk of global financial activity" to flood into asset management, private equity and hedge funds, among other less-regulated entities.
For more stories on economy & finance visit RT's business section
(RT.com)
Get a daily dose of Manufacturing Mirror news through our daily email, its complimentary and keeps you fully up to date with world and business news as well.
Publish news of your business, community or sports group, personnel appointments, major event and more by submitting a news release to Manufacturing Mirror.
More InformationPatna (Bihar) [India], July 9 (ANI): RJD leader Tejashwi Yadav on Wednesday heavily criticised the Election Commission of India for...
Fazilka (Punjab) [India], July 9 (ANI): Two accused in the murder of Abohar businessman Sanjay Verma were killed in retaliatory police...
Patna (Bihar) [India], July 8 (ANI): Bihar ADG Kundan Krishnan on Tuesday informed that the shooter who was involved in the businessman...
Patna (Bihar) [India], July 8 (ANI): Bihar minister Mangal Pandey on Tuesday vowed that the police will not spare any culprit who is...
Patna (Bihar) [India] July 8 (ANI): Bihar Deputy Chief Minister Samrat Choudhary on Tuesday said that action has been taken in the...
Patna (Bihar) [India], July 8 (ANI): The mother of Vikas alias Raja, who was killed in a police encounter near Damaiya Ghat in Patna,...
HONG KONG: China has fired back at the European Union in an escalating trade dispute by imposing new restrictions on medical device...
FRANKLIN, Tennessee: Hundreds of thousands of Nissan and Infiniti vehicles are being recalled across the United States due to a potential...
WASHINGTON, D.C.: President Donald Trump says the United States could soon reach a trade deal with India. He believes this deal would...
by Xinhua writers Yi Ling and Hou Wenkun WUHAN, July 9 (Xinhua) -- Imagine a robotic hand delicately lifting a cube of silken tofu...
The delay adds yet another twist to Trump's original 90 deals in 90 days promise -- so far yielding only two vague trade agreements...
(Photo credit: Brad Rempel-Imagn Images) Ryan Jeffers went 3-for-4 with a homer and three RBIs, and the Minnesota Twins used a six-run...