The Anatomy of Global Economic Uncertainty

Uncertainty is bad for business, and policy gridlock, unsustainable debt and a changing global order promise unsettling times for the developed world, suggests Mohamed A. El-Erian in an essay for Project Syndicate. Countries, corporations and individuals are adjusting to the changing paradigm in diverse ways – deleveraging themselves from others in debt, taking on more debt and toying with default, manipulating interest rates and inflation to allow creditors to subsidize debtors, and calling for deregulations or new regulations to boost growth or spread benefits. “Unlike emerging economies, Western countries are not well equipped to deal with structural and secular changes – and understandably so,” writes El-Erian. “The longer they fail to adjust, the greater the risks.” Countries may fail to adapt, but that does not mean individuals must do the same. El-Erian concludes that the changing global paradigm presents many opportunities as well as risks. – YaleGlobal