What is the New Normal

El-Erian explains in a bit of financial etymology:

In early 2009, I and colleagues at the investment management firm Pimco developed the concept of the “new normal.” It was shorthand for a simple yet consequential hypothesis: That coming out of the financial crisis, the economy would not recover in a normal cyclical fashion. Instead, we wrote in a May 2009 paper, “growth will be subdued for a while and unemployment high; a heavy hand of government will be evident in several sectors; the core of the global system will be less cohesive and, with the magnet of the Anglo-Saxon model in retreat, finance will no longer be accorded a preeminent role in post-industrial economies.”

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