One of the most disturbing things about our current economic era is its juxtapositions. Wages are flat, yet corporations are flush. Interest rates are at nearly unprecedented lows, yet investment lags. The economic gap between Main Street and the markets, which are increasingly volatile, is as big as it’s ever been.
In The Only Game in Town: Central Banks, Instability and Avoiding the Next Collapse, Mohamed El-Erian aims to make sense of this bifurcated world and where it’s headed. The former CEO of investment-management firm PIMCO and chief economic adviser for insurance giant Allianz explains how, in the wake of the 2008 financial crisis and Great Recession, central banks pumped unthinkable amounts of cash into the global system–around $29 trillion total–and slashed interest rates to zero. The result: rather than a Great Depression, we got a “new normal” of slower growth (but at least it was growth).
Now, that’s coming to an end. What replaces it will likely be a period of economic and political volatility and instability of the sort that we have only just begun to see, with roller-coaster markets rising and falling on the latest jittery news from China or the oil markets, and formerly unimaginable politicians like Donald Trump or Marine Le Pen taking advantage of people’s fears that tomorrow will indeed be worse than today. El-Erian’s book is a primer on where we’ve been and where we are going–and how to invest in this rocky world.
–RANA FOROOHAR
This appears in the February 15, 2016 issue of TIME.
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