Project Syndicate: The Risk of a New Economic Non-Order

The current global economic order is under strain, and the World Bank and the International Monetary Fund could pursue reforms and take steps to adjust to new economic realities, preventing disintegration and disorder, argues Mohamed A. El-Erian for Project Syndicate. The current order is rooted in “an economic paradigm that aimed to promote win-win interactions among countries, emphasizing trade liberalization, relatively unrestricted cross-border capital flows, free-market pricing, and domestic deregulation,” he explains. Economic crises combined with structural changes and growing inequality, uncertainty and distrust suggest a need for reforms including recognition of emerging economies. “With too many people feeling marginalized, forgotten, and dispossessed – and angry at the leaders and institutions that have allowed this to happen – domestic policy pressure has intensified, causing countries to turn inward.” Ongoing fragmentation and protectionist tendencies are eroding prosperity and stability and eventually might lead to outright conflicts. El-Erian concludes that cross-border economic cooperation is vital for security of all types. – YaleGlobal

Project Syndicate: The Risk of a New Economic Non-Order

IMF and World Bank meetings must start discussions on losing dynamics gaining traction in the global economy – and delaying reform will extends pain
Mohamed A. El-Erian
Tuesday, September 19, 2017

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Mohamed A. El-Erian, chief economic adviser at Allianz, the corporate parent of PIMCO where he served as CEO and co-chief investment officer, was chairman of US President Barack Obama’s Global Development Council. He previously served as CEO of the Harvard Management Company and deputy director at the International Monetary Fund. He is the author, most recently, of The Only Game in Town: Central Banks, Instability, and Avoiding the Next Collapse.

© Project Syndicate - 2017