Review of
Instaread
Summary of The Only Game in Town Central Banks, Instability, and Avoiding the
Next Collapse by Mohamed A. El Erian
Five out of five stars
It is
reasonable and a bit frightening to realize that the prevention of an even
greater financial disaster in 2008 and much of the economic recovery since then
has been due to the actions of central banks. The directors of the central
banks have aggressively engaged in innovative tactics such as quantitative
easing and incredibly low interest rates in order to give economies around the
world a boost.
Yet, even with
all of that, the economic recovery has been slow in most areas in the world and
the central banks are near the end of what they can do. It is such an unusual
situation that there are now banks that are offering negative interest rates (Bank
of Japan) and others are considering the same option. As El Erian emphasizes by
putting it in the title of the book, political leaders have largely failed at
developing sound economic policies for recovery. Therefore, the only major institutions
that can drive economic recovery are the central banks.
As the author
of the summary mentions in the author’s style section, El Erian uses a lot of
technical jargon, even when it is unnecessary. This can make the book difficult
for the general reader to comprehend. Yet, given the significance of the
subject, I strongly encourage all people interested in the future direction of
the world economy to read this summary amd make their own decision about
reading the book.
Several main points of interest are made in the
summary, including the reality of the limits of what central banks can do. The
frightening point is that they are generally at the limit of what they can do.
After all, one is skeptical as to how effective negative interest rates can be.
This book was made available for free for review
purposes.
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