Mohamed A. El-Erian , Columnist

How Advanced Economies Are Looking More Like Emerging Markets

The European Central Bank dangles the prospect of more stimulus, a short-term approach that makes lasting progress harder.

June 19, 2019 at 5:30 AM UTC

By Mohamed A. El-Erian

Mohamed A. El-Erian is a Bloomberg Opinion columnist. A former chief executive officer of Pimco, he is president of Queens’ College, Cambridge; chief economic adviser at Allianz SE; and chair of Gramercy Fund Management. He is author of “The Only Game in Town.”

Mario Draghi and other central bankers wield cyclical tools against structural problems.
Photographer: Andreas Arnold/Bloomberg

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Yields on German government bonds on Tuesday ventured deeper into the uncharted territory of negative nominal levels, triggering various direct and indirect market reactions. More subtly, this reinforces a trend of the past decade: Advanced countries are behaving more like emerging economies in certain ways.

This does not mean that these countries are converging down toward their less prosperous and more institutionally unstable counterparts. But it does mean that adding an emerging-market perspective can help in analyzing the prospects of advanced economies.