Here are the 4 issues that will determine the future of the global economy, according to Mohamed El-Erian
"And it is not just market narratives that have seen volatility," famed economist Mohamed El-ErianWhat's definitely the case is that there's a lot of uncertainty about what comes next.
While it can be difficult to piece together a coherent outlook, El-Erian says there are actually four factors that are guiding the trajectory of the world economy right now:"First, there is the less elastic supply side of the economy as the world navigates the energy transition, labour market tightness, corporate rewiring of supply chains and the manner in which geopolitical tensions are changing globalisation.
Moving forward, the top economist says the Fed, and large institutions, must adapt quickly and be open to new ideas on handling a murky and unprecedented macro environment. There's likely to be more financial stress for firms and turmoil hitting areas of the economy like commercial real estate, if they can't quickly adjust to new realities.
"For the wellbeing of the country, it is incumbent on these institutions to be more open to self-disruptions and for their governance structure to involve stronger accountability," the report reads. El-Erian added:"Without that, the steadying and guiding role of US institutional maturity will weaken even faster in the face of eroding credibility, turning this once dominant US comparative advantage into an even greater source of domestic and global instability."
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