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The Only Game in Town

Mohamed A. El-Erian Random House, 296 pages, $28

To Mohamed A. El-Erian — an economist, former investment manager and commentator — the world is at a critical juncture. We are destined, he believes, to turn sharply either toward a resumption of historical growth rates or to a slide into full stagnation, or worse.

El-Erian frames "The Only Game in Town: Central Banks, Instability and Avoiding the Next Collapse" around the world's central banks, on the sensible grounds that with the rest of government focused on austerity, the one source of help for still-wallowing economies has been easy money, pro­vided by low interest rates and quantitative easing. Not since the late 1970s have central banks been so much in the public eye — and so controversial. For every supporter who believes they are the only game in town, another is convinced that expansionary monetary policy has put us on the road to another round of asset bubbles and, perhaps, inflation.

El-Erian expertly offers a balanced view. Beyond central banks, he offers a grand tour of the challenges we face, along with ideal solutions and a look at how issues including cognitive diversity and cultural bias affect the economy. All in all, this is an accessible, albeit familiar, cruise through pretty much all things economic. The biggest gap in the book is insufficient recognition of the problem of productivity. Without increases in efficiency, workers can't get paid more and the economy can't expand. And of late, productivity growth has been woefully light.