As I have argued, the synchronized pickup in global growth is the result of the happy coincidence of a set of unrelated factors, rather than the product of comprehensive pro-growth policies and their interactions.
While policy has been an important driver in the U.S., Europe’s heartening improvement is primarily due to a natural economic and financial healing process. Along with China’s successful growth soft-landing, other emerging-market economies are being boosted by recoveries from distinct shocks: from politics in Brazil, demonetization in India and commodities in Russia.
The opportunities and risks associated with global growth should feature prominently in the policy discussions in Washington. The key will be to strengthen both the individual and collective resolve to move forward more aggressively with pro-growth policies, many of which have been identified but not implemented. There also is a need to take on the risks that, in the majority of cases, are a direct outcome of too many years of too low and insufficiently inclusive growth.
How this growth transition is handled will have an amplifying effect. Not only will it prove an important determinant of the ultimate success of the other two transitions -- creating scope for either virtuous or vicious cycles for growth, financial stability and policy rebalancing -- but it will also feed into politics and social integrity, including whether and how fast trust is restored in institutions and expert opinion.
Mohamed A. El-Erian is a Bloomberg View columnist. He is the chief economic adviser at Allianz SE and chairman of the President’s Global Development Council, and he was chief executive and co-chief investment officer of Pimco.
This column was provided by Bloomberg News.