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The Only Game in Town: Central Banks, Instability, and Avoiding the Next Collapse

3.59  ·  Rating details ·  786 ratings  ·  79 reviews
NEW YORK TIMES BESTSELLER •Dr. Mohamed A. El-Erian, one of the world’s most influential economic thinkers and theauthor of When Markets Collide, has written a roadmap to what lies ahead and the decisions we must make now to stave off the next global economic and financial crisis.

Our current economic path is coming to an end. The signposts are all around us: sluggish
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Hardcover, 320 pages
Published January 26th 2016 by Random House
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Emma Sea
Aug 28, 2017 rated it liked it
It is refreshing as hell to read an author who asserts, "We all owe a big debt of gratitude to central banks. Acting boldly and innovatively in the midst of a massive financial crisis, they helped the world avert a multi-year depression that would have wrecked havoc on our generation and that of our children."

A fascinating look at world banking from an insider.
Richard Thompson
Jun 25, 2016 rated it did not like it
Mohamed El-Erian is probably a really smart guy, but you wouldn't know it by reading this book, which is 250 pages of turgid jargon masquerading as insight. It's not even decent financial journalism, just a high level overview of trends in the world economy written in central bank speak that does more to obfuscate than elucidate. El-Erian could have written a really interesting book describing the choices made and analysis done by central bankers in pursuing the policies that pulled the world ...more
Leonard
Dec 06, 2016 rated it really liked it
Recommends it for: investors, financial advisors
A must-read not just for investors and investment advisers, but anyone concerned with the global economy. El-Erian gives insight into the coming challenges for policy makers and the pitfalls that may derail economic progress, in a world where monetary policy, vis-a-vis central banks, is "the only game in town."
Aaron Terrazas
Jan 31, 2016 rated it really liked it
I went back and forth about this book as I read it.

The author brings a unique perspective to a growing (and increasingly staid) literature on the financial crisis and economics that lie ahead. He's undoubtedly a very smart guy.

However, much of the early chapters is rehash of material already presented elsewhere. There's something a little untoward about quoting yourself at the start of a chapter, as he does at the start of Chapter 7.

There were some novel parts. His analogy comparing bank
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Daniel
Apr 23, 2016 rated it it was amazing
Divergence is actually a strong theme of this book.

Having found that they are the only ones supporting the economy from imminent collapse since the Financial crisis, Central Banks have become the only game in town. Their action using QEs and lowering interest rates (to negative territories in Japan and Europe) have made them gone into the Unknown. Governments have however not caught up with their part of duty to help the economy (austerity kills). So Central Banks are diverging from
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John Tyson
Jul 05, 2016 rated it really liked it
For somebody who would classify himself as a "central banking novice" in terms of understanding the influence and role of central banks in the lead-up to the current day macroeconomy, El-Erian's book served as both a fairly solid primer and a not overly directive prescription on how to think about central banks and their role in the global economy on a go-forward basis.

He offers his own thoughts while drawing on the ideas of many other writers, thinkers and thought-leaders, and then he
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Anusar
Jan 30, 2016 rated it did not like it  ·  review of another edition
Utter failure

El Erian, a usually perceptive observer and strategist utterly fails to make the case. I failed to locate a single argument for his central claim: that we are near the end of the road of central banks as the only game in town and that there are two exits, a good one and a bad one, from here on. There are hints that this bimodal distribution is due to policy divergence among the center countries, but no argument is offered as to why that would be the case. Instead, El-Erian spends
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Meghan
May 16, 2016 rated it liked it
Shelves: finance-econ, 2016
El-Erian argues that we are approaching a T-juncture, a fork in the road, at which our economy/society will take one of two vastly different paths: prosperity or recession (or worse). He implores political leaders to step in to influence the outcome, saying that Central Banks lack the tools needed to create sustained, inclusive growth (e.g., ability to invest in infrastructure).

At times this was a bit of a slog (probably could have been condensed), but it's a compelling message.
James
Feb 22, 2019 rated it did not like it
Central Banks, Instability, and Avoiding the Next Collapse is the title, but most of the book is drivel,
written more like a memoir to himself.
Just by chance a few days earlier I was reading a book by david dreman,
he sneered at the "new normal",
I'm reading this book & the author claims he came up with that term.
After mentioning that people said it was idiotic, he tells us someone else came up with the term before him.

He whines about 28 years of Greek progress being wiped out.
He doesn't tell
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Ben Irvin
May 01, 2016 rated it liked it
Shelves: economics-read
3rd book I've read in a series on macroeconomics. This one is less well written and less informative than others so far. El-Erian uses a lot of jargon and repeats himself frequently here. He is good in explaining how the Central Banks have carried most of the load in keeping us out of a Depression, but is too easy on the politicians in accepting their foolish and ignorant neglect of their responsibility in supporting the economic sphere. As best I can discern, the "less government " camp is ...more
Tom Armstrong
Jun 01, 2016 rated it liked it
Always good to hear the perspective of someone as smart and well-informed as Mohamed A El-Erian. That said, this book could have been better. A lot of it was a standard rehash of the financial crisis, then there was an entire section on diversity that seemed to come from no where and didn't fit the book at all. There were enough good sections/ideas (specifically the explanation of the liquidity crunch and his theory of Bimodal Distributions) to make the book worth reading, but it was definitely ...more
Mehrsa
May 08, 2016 rated it liked it
This was such a promisingly broad and exploratory book, but it narrows over time and falls pretty short on analysis.
Jake Losh
Mar 12, 2016 rated it liked it
A really great summary of what's been ailing the global economy the past few years, but I was ultimately disappointed by his policy recommendations.

What follows is a summary of the book (mainly for my benefit)
(view spoiler)
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Jake
Feb 21, 2016 rated it liked it  ·  review of another edition
Three stars for its historical detail, not its telling of the future. The beginning provided useful context for central bank actions since the financial crisis. The elaboration of the "ten key issues" facing the global economy (see below) in Chapters 9 - 18 was most interesting. The second half of the book, which outlined future prospects, was too vague and scattered to be helpful.

Ten key issues (Ch. 9 - Ch. 18)
1. Many advanced economies still lack proper growth models - i.e. too
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Alvin
Dec 02, 2017 rated it it was amazing
El-Erian feels that the Central Banks saved us from a horrible economic collapse ten years ago; however, their effectiveness has waned. For economic growth and stability to proceed, the Banks need to hand off policy to other institutions. El-Erian identifies 10 big challenges, the desirable way forward (functioning government!), moves on from what "should" happen to what is "likely" to happen. El-Erian believes we are nearing a "T" junction in economic policy which will lead to a bimodal ...more
Luc
This book is a collection of essays from economist and financial strategist Mohamed El-Erian. The author guides us towards new perspectives about the world economy and business environment. The book portrays an image of a T-junction where two general outcomes might lay ahead. One outcome is more volatility in world markets, more income inequalities and more socio-political tensions. The second outcome brings us fewer inequalities, more opportunities for households and businesses along with ...more
Richard
Authored by a "Senior Fellow" at my alma mater I felt obligated to understand him a bit. An enthusiastic writer, he surveys the issues surrounding the 2008 financial crash and its aftermath, concluding that the critical role played by Central Banks is no longer ideal and that new approaches are needed to preserve society.

I found his arguments fairly mainstream and unexceptional, particularly in light of all that's happened since he wrote in 2016.
Andrew
Jan 23, 2018 rated it liked it
Shelves: business, economics
El-Erian is pro-central banking and advocates for more global banking to avoid the next collapse.
People with a basic economics will be able to read this book but most people will not process his arguments. Demystifying central banks is always difficult especially when the Federal Reserve does not disclose their financial dealings. El-Erian provides a few analogies and examples to justify his faith in central banking. The assumptions are a bit basic but simple enough to understand the framework
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Nathan
Jan 14, 2018 rated it liked it
Central theme: Central banks have been playing a more active role post 2008 than in the past. They're very limited in what they can do and while they've helped the recovery, they need government to help spur more real growth or else their policies could collapse.

I didn't know much about the role of central banks and it is very interesting to learn more. While the book was a good read, parts were more nuanced than I wanted so I recommend lots of skimming or only reading this if you're already
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Vasco
Nov 07, 2019 rated it really liked it
The bad: Despite being a good critique of the central bank changing roles and politics over the years, the book doesn’t do much in way of presenting a solution. It serves as mostly a warning on what the possible future consequences are, being 99% problem oriented and 1% solution oriented.

The good: It presented a summarized and concise description of the evolution of central bank activities throughout the years. Great in that specific aspect.
Dan
Dec 31, 2017 rated it liked it
Good Analysis Poorly Packaged

El-Erian is clearly very bright, and the central messages of the book are hard to argue with. We are indeed in an environment where central banks cannot do much more to set polities and economies on a better course. However, there is too much repetition, and the book needed more thorough editing. I found it difficult to follow the narrative thread. It would not be unwise to read segments that interest you and leave the rest behind.
John Stelman
Feb 25, 2019 rated it it was amazing
Great book! Mohamed delivers AGAIN (nice follow through from "When Markets Collide).
some takeaways - "Cognitive Diversity" -- "generally constructed bell curve with left and right tails needs to be modified to a bi-modal curve with two distinct, POTENTIAL, financial outcomes. A lot appears to be riding on fiscal policymakers - monetary policy has done a yoeman's job!! I was hoping that Mohamed would lead the IMF (I'll bet his family is thinking otherwise).
Steven C.
Feb 04, 2018 rated it it was ok
The author is a brilliant man. I've seen him give interviews multiple times on TV and his thoughts are terrific. However, this book is a nightmare. The author took simple concepts and explained them in a complicated manner. I'm not sure why he decided to speak thoughts that are difficult to comprehend with consistent use of big words (not needed) and ideas in different directions. I would recommend watching his interviews but not reading his book.
Vince
Oct 17, 2017 rated it liked it
The rating would have been higher except that the author was sometimes unfocused, with entire chapters that were not at all related to central banking. The book also contained a lot less real concrete recommendation and only very vague notions about the kinds of policies that can improve our economic outlook.
Joseph
Jan 02, 2019 rated it it was amazing
Insightful as well as entertaining, this book takes a look at the why and how of the economic collapse of 2008. The author describes the role central banks had in the collapse and the steps being taken to prevent this sort of thing from happening again. I would recommend this book to anyone interested in economics as well as the reader of current events based books.
Rick Scott
Jul 24, 2017 rated it it was amazing
I found this to be an excellent book on the difficulties of the financial world right now. The challenges of the political arena vs. the financial arena and different goals of each. I think that he also high-lights some of the reasons why we are seeing some of the more radical parties and individuals having success in countries around the world.
Vineet Tandon
Jun 03, 2018 rated it did not like it
Avoid .... You don’t need to read a book which in the end concludes that - ‘nothing is known, everything is uncertain and anything can happen.’ - without any new insights and in the form of a verbal diarrhoea !!!
Von_feng
Oct 09, 2019 rated it really liked it
Shelves: economics
这本书需要有一定的宏观经济知识才能读懂,对普通读者并不友好。书中最后一章关于拳王阿里的故事,真的很适合作为全书的总结:“这个故事讲的不仅是认识到双峰分布、做出相应反应,以及在这个过程中克服狭隘的观念、陈旧的框架和盲点;同时,它讲的也是积极去改变两个潜在结果的分布,朝着更好的结果去努力的事情。除此之外,它还告诉我们利用结构的重要性吸收新的见解,改变原有的游戏计划;它还凸显了可选性、弹性和灵活性三者之间的紧密关联。”
Jeffrey
Oct 18, 2017 rated it liked it
Great summary of a various assortment of El-Erian's ideas, however a little bit repetitive at times. His key bimodal distribution ideas is good as his call for governments to do more. However, ones doubts whether governments will actually heed his call.
Richard Derus
Jan 19, 2017 rated it really liked it
Rating: 4* of five
J. Michael
Mar 31, 2016 rated it liked it
Well-written and educational. In parts - especially the recap of 2008 - it is terrifying. I learned a lot of sobering stuff about The Fed and the ECB, their fallibility, and the tightrope they're walking. El-Erian clearly has a handle on the economic/monetary problems the world faces, though the solutions he offers are a bit general, vague and/or aspirational for my taste. I enjoyed the book though - mostly because I feel like I've gotten a peek behind the curtain at the monetary policy wizards ...more
Darren
Apr 30, 2016 rated it it was amazing
Is this book something you really should read with one eye closed out of fear? The author – one of the world’s most influential economic thinkers – looks ahead to see what may lead to the next global economic crash and financial crisis and considers what we may be able to do as a society to mitigate its effects if we cannot entirely cut it off at the pass.

The author believes the signs are already here – although are the movers and shakers paying attention or doing the equivalent of covering
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John  Mihelic
I picked up this book because of the bright yellow and black cover. What can I say, I’m superficial. And it had some good blurbs on the back. Hadn’t read the author before, but I thought I’d take a chance when finally getting to the flap-text.

I was finishing it up in bed last night, and my wife was asking about it, and the best I could do to recommend it was that I wanted to finish it. I found it a slog mostly, but it was interesting enough to want to engage with all the way through. The author
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Chad Supp
Feb 23, 2016 rated it liked it
El-Erian does an effective job of outlining the historical objectives of central banks, and how they are being tasked to meet current objectives for which they are very much ill-equipped to achieve. He does this not by laying blame on central banks for assuming these objectives, but instead explains how they are simply filling the gaps for policy makers who are unwilling or unable to deploy better tools for the global economy.

There's a lot here. El-Erian outlines the risks of staying on the
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Feng Ouyang
The author is an experienced economist and policy maker. In this book he shared a lot of insight on issues, challenges and policy options on global economy. While the analysis of current situation is eloquent and insightful, there is not much that has not been talked about before by others. The book is especially short on policy option analysis, the author’s claims to the contrary notwithstanding. Especially, the book does not offer advises on what the central banks can do to address these ...more
John Mchugh
Apr 24, 2016 rated it liked it
An exceptionally insightful analysis of the inner working of our domestic and international financial systems, and where they might be taking us. Or we them. I have long admired his thinking, and continue to do so. That said, the book reads a bit more like an academic thesis than an actual account of how the financial wheels currently turn and where they are destined to take us in the years ahead. Insightful, but too abstract for my appetite. It's a treatise, a somewhat bare bones one at that. ...more
Doug Cornelius
Apr 11, 2016 rated it really liked it
The Only Game in Town is an exploration of central banks in the economy. The brilliant Mr. El-Erian sees a coming crisis. One that can be avoided, but we must take action to avoid it.

He lauds the Federal Reserve and The European Central Bank for taking decisive steps to stop the financial crisis of 2008. The central banks created liquidity and propped up the financial system and financial institutions. The central banks continued their work to heal the economies as countries entered the Great
...more
Warren Mcpherson
Feb 28, 2017 rated it liked it
Shelves: people-at-work
Smart, valuable, at times imprecise, analysis of the current economy from a perspective strongly sympathetic with the position of the central bank. The great thing about this perspective is that it builds a good idea of how central bankers perceive their situation and how they are likely to act.

The book mostly seems to carry traditional conservative discussion, but the Federal Reserve is a technocratic institution. As the book points out it does not need to respond to market or political factor
...more
Christopher
In the wake of the financial crisis and recession of 2008, we've experienced an "unusually uncertain" period of economic history. On the one hand, we've been experiencing GDP and job growth unlike anything the U.S. has seen since the 1990s. On the other hand, inequality has risen to levels not seen since the Gilded Age, governments have bickered more about national budgets and debt ceilings than economic transformation, and all of the financial gains of the past eight years feels very fragile. ...more
Harold
I have heard El-Arian on the radio and seen him on television being interviewed. He is smart, thoughtful and articulate. So I am surprised that I don't really know what this book is about. He started by talking about central banks, but it then wanders through various financial and management issues, including a section saying that Pimco was light enough on its feet (through good planning) to navigate the financial crisis, although he doesn't quite say how. In the end, this is a better book to ...more
Steve
Jul 13, 2016 rated it liked it
Or, "How I Learned to Stop Worrying and Love Outcomes with Bi-Modal Distributions." Some good information and analysis about how central banks dealt with the 2008 financial crisis in the absence of political action. However, much of this sounds like someone reading his power point slides. The presentation on decision-making in bi-modal situations is also interesting and enlightening, but I did not find the book successfully molding its parts into a whole.
Paul Vigna
Good overview of the problems of having central banks standing as backer of last resort for the global financial system. Emphasizes the important point that this can't last, and the economy is going to go one of two ways eventually, and if this situation isn't resolved, the economy is going to go down, badly.
Arup
Mar 16, 2016 rated it it was amazing
A great summary of the current economic/political stagnation around the world. When you think about the gridlocks we are trapped in, coupled with the micro disruptions that technology is bringing, you would realize that things highlighted in the book are to be acknowledged, discussed and acted upon now and not later.
Garrick Infanger
Dec 06, 2016 rated it liked it
Enjoyed this book. Really like El-Erian and his point of view. My only complaint is he rambled around to a lot of different topics beyond the central bank premise. That being said I appreciated his thoughts and loved hearing about his experiences during the crash.
John
Jul 23, 2016 rated it liked it
new normal/secular stagnation/new mediocre

More than 3/4 of 13ers do not trust the Gov. to look after their basic interest. Cali proposition 13, young new home buyers pay several times as much property taxes as their elder neighbors with identical homes.
VA a 33 year couple with a 30k income & a 100k house pays more than $8,000 in major local, state. & federal taxes, while the typical 65 year old couple with the same income & house pays nothing at all.
Dat
May 13, 2016 rated it liked it
Starting with a strong focus on monetary policy and a great number of pages on spelling out the current problem with public policy making, the book lacks a meaningful recommendation list. At the second part there was probably too much time spent on a somewhat extraneous subject - behavior study - that did not really materialize in the conclusion.
Carl Nelson
Mar 10, 2016 rated it did not like it  ·  review of another edition
Little New

Don't waste your money on this book. It contains no new insights into the crash of 08 or the current lack of growth. Read Gordon's Rise and Fall of American Economic Growth and Stout's Shareholder Value Myth for meaningful new ideas.
Carl
Jan 18, 2017 rated it really liked it
Good review of last few years economic policy (or non-policy) and difficulty we face. However, the last few chapters were on diversity and seemed totally unconnected to main part of book!
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Dr. Mohamed A. El-Erian is the CEO and co-CIO of PIMCO, a global investment management firm and one of the world’s largest bond investors with approximately US$1.2 trillion of assets under management at the end of 2010.

In his capacity as CEO, El-Erian is responsible for setting the strategic direction of the firm and leading its operations globally. As co-CIO, and together with PIMCO co-founder
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“Ever since the 2008 global financial crisis, central banks had ventured, not by choice but by necessity, ever deeper into the unfamiliar and tricky terrain of “unconventional monetary policies.” They floored interest rates, heavily intervened in the functioning of markets, and pursued large-scale programs that outcompeted one another in purchasing securities in the marketplace; to top it all off, they aggressively sought to manipulate investor expectations and portfolio decisions.” 1 likes
“It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is most adaptable to change.” —CHARLES DARWIN” 1 likes
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