Mohamed A. El-Erian , Columnist

Demand Is Not the Economy’s Problem. Supply Is.

Policy makers and central bankers are stuck in a mindset from the last crisis and need to alter their thinking.

October 1, 2021 at 9:00 AM UTC

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.”

The multifaceted efficiency of a just-in-time global economy has become a source of cascading fragilities and disruptions.
Photographer: Archive Photos/Getty Images

Provide news feedback or report an error

Site feedback:

Take our Survey

This article is for subscribers only.

Coming out of the 2008 global financial crisis, it took too many too long to recognize that the economic shock was more structural and secular rather than cyclical. The result was a policy response that, while effective in dealing with the immediate emergency, proved insufficient for longer-term economic well-being.

Covid-19 has amplified the vulnerabilities of the disappointing recovery that followed, particularly when it comes to socioeconomic inequalities, co-opted institutions and distorted financial markets. Meanwhile, what took too long to happen a decade ago — recognition that the world faced a structural deficiency of aggregate demand — is now hindering timely responses to the latest challenges.