The new normal

De Mohamed  El-Erian, en su libro 

The global financial crisis that shook virtually every country, government, and household in the world in 2008–09 gave way to a frustrating “new normal” of low growth, rising inequality, political dysfunction, and, in some cases, social tensions—all despite massive policy interventions on the part of central banks and transformational technological innovations. 

Now this new normal is getting increasingly exhausted. For those caring to look, signs of stress are multiplying—so much so that the path the global economy is on is likely to end soon, and potentially quite suddenly. As we approach this historic inflection point, unthinkables will become more common and insecurities will rise, especially as it becomes clearer that, rather than transition smoothly and automatically, the current path could give way to one of two very different new roads. 

The first promises higher inclusive growth and genuine financial stability. But, in stark contrast, the second would see us mired in even lower growth, periodic recessions, and the return of financial instability. Fortunately, there is nothing predestined about what will come after the exhaustion of the new normal. The road out of the upcoming “T junction” can still be influenced in a consequential manner by the choices that we make, as households, companies, and governments...

... “Like ancient doctors, who tried to explain the causes of diseases while knowing nothing about germs or bacteria, academics sought to describe the functioning of developed economies while ignoring the financial sector and the risks it contained.” F ERDINANDO G IUGLIANO