Mohamed a el Erian writes: The world is increasingly characterized by divergence, in economic performance, financial policy and financial markets.  We are on a very bump road to globalization.

Experimental policies in the advanced markets, like the Euro-zones large-scale asset purchases,were able to slow a vicious cycle of subpar economic performance.   At the same time, the US Federal Reserve is exiting from these policies.  Market forces have led to dramatic shifts in exchange rates.  Even healthy economies like South Korea are willing to lower the value of their currency and leave the US standing alone.

Political leaders worldwide seem unwilling to perform their economic governance responsibilities.  These include structural reforms to revamp the growth engines, efforts to rebalance aggregate demand, and elimination of debt overhangs.  This probably arises from ‘inertia’ politics —  a “can’t, won’t, shouldn’t’ mentality.  Leaving central banks and market forces to govern the globe is simply not enough.