The Only Game in Town

January 4, 2016
El-Erian, former CEO of investment firm Pimco, sets the stage for his well-informed, if sometimes overstretched, argument with a Larry Summers quote: "The world has largely exhausted the scope for central bank improvisation as a growth strategy." Central banks have pulled the world out of the Great Recession, but the critical task of creating sustainable global economic growthânot temporary money bubblesâremains. If governments don't accomplish this, they risk opening a geopolitical Pandora's Box: generational joblessness; worsening inequality; eroding institutional credibility; political dysfunction; and financial excess. El-Erian's formula for avoiding this is reduced to four basic prescriptions: seriously address economic growth; match ability and willingness to spend; reduce the burden of debt; and improve policy coordination. El-Erian is at his best when he sticks to what he knows: finance. But his thesis is that finance only takes you so far, so his book's last section finds him verging into trendy but less relevant territory with references to "cognitive diversity" and quotes from Sheryl Sandberg. These passages tend to deviate from his usual intellectual rigor with Oprah-like feel-good mantras. Nonetheless, this is a prescient warning against our current overreliance on central banksâand a call to action toward building a sustainable global economy. Agent: Andrew Wylie, Wylie Agency.

February 1, 2016

El-Erian (chief economic adviser, Allianz; chair, President's Global Development Council) examines the subject of central banks in his latest book, following his award-winning When Markets Collide. Rather than providing a simple overview of central banks and their role, El-Erian uses the bank as a backdrop for discussing the current crossroads he sees in the global economy and the role these institutions could play in shaping the future. After presenting ten big issues, including those related to unemployment, economic expansion, and political dysfunction, El-Erian provides his ideas for what should happen next, but also for what is likely to happen, a distinction he explains as the difference between what is desirable and what is actually feasible given the current political environment. VERDICT This easy-to-read discussion from a well-respected financial industry insider on the current state of the economy and the role of central banks will satisfy anyone who wants to learn about economics or the policy decisions that affect financial stability.--Elizabeth Nelson, McHenry Cty. Coll. Lib., Crystal Lake, IL

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