Allianz chairman Mohamed El-Erian bolsters a new American economic paradigm in lieu of the Washington consensus.

Apple Boston

2018-04-20 10:38:00 Fri ET

Allianz chairman Mohamed El-Erian bolsters a new American economic paradigm in lieu of the Washington consensus. The latter dominates the old school of thought prior to the Trump administration. Most key countries would benefit from embracing domestic deregulation and free trade and open cross-border capitalism. When the Washington consensus turns into blind faith, however, America suffers the major discontents of financial globalization such as subprime mortgage risks in the global financial crisis from 2008 to 2009.

Unemployment surges to unforeseen double digits, capital investment wanes, real productivity protracts, and U.S. residents reap lower disposable income.  Secular stagnation emerges from the worst-case scenario where the central bank hits the zero lower bound on interest rates to ease labor-market frictions, whereas, higher prices become inadvertent seigniorage taxes. Political polarization further deepens economic income and wealth inequality.

With socioeconomic advantages such as elite education and political clout, the rich become richer as most of their income and wealth would result from cash dividends and capital gains. El-Erian thus proposes his new consensus on fair trade, artificial intelligence, big data, and greater labor mobility. This new consensus better adapts to the current tech titan dominance in both American labor and capital markets.

 


If any of our AYA Analytica financial health memos (FHM), blog posts, ebooks, newsletters, and notifications etc, or any other form of online content curation, involves potential copyright concerns, please feel free to contact us at service@ayafintech.network so that we can remove relevant content in response to any such request within a reasonable time frame.

Blog+More

Internal capital markets and financial constraints

Charlene Vos

2022-10-15 09:34:00 Saturday ET

Internal capital markets and financial constraints

Internal capital markets and financial constraints Duchin (JF 2010) empirically finds that multidivisional firms with robust internal capital markets ret

+See More

Janet Yellen worries about U.S. government debt accumulation, expects new interest rate increases, and warns of the next economic recession.

Amy Hamilton

2018-11-05 10:40:00 Monday ET

Janet Yellen worries about U.S. government debt accumulation, expects new interest rate increases, and warns of the next economic recession.

Former Fed Chair Janet Yellen worries about U.S. government debt accumulation, expects new interest rate increases, and warns of the next economic recession

+See More

Credit supply growth drives business cycle fluctuations and often sows the seeds of their own subsequent destruction.

Fiona Sydney

2018-04-26 07:37:00 Thursday ET

Credit supply growth drives business cycle fluctuations and often sows the seeds of their own subsequent destruction.

Credit supply growth drives business cycle fluctuations and often sows the seeds of their own subsequent destruction. The global financial crisis from 2008

+See More

Oxford macro professor Stephen Nickell and his co-authors delve into the trade-off between inflation and unemployment in the dual mandate of price stability and maximum employment.

Apple Boston

2023-08-07 12:29:00 Monday ET

Oxford macro professor Stephen Nickell and his co-authors delve into the trade-off between inflation and unemployment in the dual mandate of price stability and maximum employment.

Oxford macro professor Stephen Nickell and his co-authors delve into the trade-off between inflation and unemployment in the dual mandate of price stability

+See More

House of Representatives considers a government expenditure bill with border wall finance and so sets up a shutdown stalemate with Senate.

Laura Hermes

2018-12-23 13:39:00 Sunday ET

House of Representatives considers a government expenditure bill with border wall finance and so sets up a shutdown stalemate with Senate.

The House of Representatives considers a government expenditure bill with border wall finance and therefore sets up a shutdown stalemate with Senate. As fre

+See More

Former Vice President Joe Biden enters the next U.S. presidential race with many moderate policy proposals.

Monica McNeil

2019-05-05 10:34:00 Sunday ET

Former Vice President Joe Biden enters the next U.S. presidential race with many moderate policy proposals.

Former Vice President Joe Biden enters the next U.S. presidential race with many moderate-to-progressive policy proposals. At the age of 76, Biden stands ou

+See More