Allianz chief economic adviser: the recession is not temporary, the world is on the verge of a big change

Markets are always optimistic, such as the previous expectations of "temporary" hyperinflation, and now the "temporary" recession is recognized.

But top economist Mohamed El-Erian, chief economic advisor to Allianz, says the world is not just teetering on the brink of recession, but is in the midst of a profound economic and financial transformation.

He notes that the world economy will enter a recession when a business cycle reaches its natural end and before the next cycle really takes off.

Crucially, however, he argues that the world is undergoing major changes that are making the cycle longer than before, and therefore the economic restart is being pushed back.

And there are three trends that are changing the world economic landscape: the change from lack of demand to lack of supply, the end of the era of unlimited central bank liquidity, and the move toward a more fragile phase in financial markets.

Three major trends Economic recession, seen by many economists and analysts as a normal phase of the economic cycle. So in the optimistic minds of many, this recession is both short-lived and can be quickly reversed.

But El-Erian points out that many analysts tend to give some "customized" explanations for the series of profound economic events in the past, but the commonality behind these events may imply a change in the global business cycle and the logic of economic operation.

In the aftermath of the 2008 financial crisis, most economists blamed lack of demand for sluggish economic growth, so the U.S. addressed the problem through stimulus spending as well as low interest rate pull, and it has been repeated since.

The problem now, however, is that supply is replacing demand as the cause of economic stagnation.

According to El-Erian, it will not be easy for the global economy to recover after the resumption of the new crown shutdown. Businesses are questioning the globalization model, a general shortage of labor and a shift in business models due to climate change, making supply chains a huge problem.