According to economist Mohamed El-Erian, the Federal Reserve has made policy mistakes by acting too late to tame inflation, and then doing too little. Now El-Erian, chief economic advisor at Allianz, the German financial-services giant, and chair of Gramercy Funds Management, worries that central bankers have been left with bad choices that raise the risk of financial and economic accidents.
El-Erian has seen his share of accidents and near misses in a storied career. He has been deputy director at the International Monetary Fund, chief executive at fixed-income powerhouse Pimco, and CEO and president of Harvard Management Company, which oversees Harvard University’s endowment. After the 2008-09 financial crisis, he coined the term “new normal” to refer to the subsequent era of slow economic growth.
