The U.S. economic recovery has been held back because Americans lack trust with one another over the coronavirus, Mohamed El-Erian told CNBC on Thursday.
“It is very difficult for any individual to be certain whether the other person is healthy or not, and that other person is not certain whether you’re healthy or not,” El-Erian said in a “Squawk Box” interview. “So until we have a way of saying, ‘the probability of us getting sick is low,’ then you’re going to have hesitancy.”
El-Erian, chief economic advisor at Allianz, compared the situation to increased counterparty risk during the financial crisis, when banks lost confidence in other financial institutions being able to meet their obligations in a transaction.
“When banks don’t trust each other, they step back. What we’re having here is human counterparty risk,” he said. “I know lots of people who are able to go out and interact in