By Mohamed A. El-Erian
FORTUNE -- Of two big events occurring this week -- the G-8 Summit in Northern Ireland and the policy meeting of the U.S. Federal Reserve -- which do you expect will attract more attention in economic policy circles and markets? It should be the former but will likely to be the latter. Understanding why says a lot about the world we live in today.
The G-8 Summit should be the most consequential economic attraction this week. After all, these Summits don't happen often, especially when compared to the frequency of Fed meetings. They convene powerful countries represented by their highest elected officials. And they start with the presumption of a common vision for the global economy, at least for seven of the eight G-8 members.
Yet there is a difference today between what should happen, and what is likely to happen. And when it comes to the latter, the Summit is likely to be less consequential than the Fed when it comes to global economic prospects.
Part of this is due to past outcomes. As British Prime Minister David Cameron noted a few days ago, G-8 Summits have a tendency to issue grand proclamations that end up leading nowhere. Thus his wise decision to opt for "an ambitiously modest agenda" -- that is, something less grand but more likely to be effective.
Yet even this astute course correction is likely to fall short when it comes to material economic outcomes.
Undoubtedly, the world's consistently anemic economic growth (particularly in the West) and the return of financial market volatility require better global policy coordination. Yet the current G-8 membership lacks the right country composition for meaningful progress. (The G-20, while much better at including the systemic emerging economies, has proven too large and incompletely designed to be consistently effective).
Meanwhile, the Summit's agenda may well be dominated by two other important issues where differences have already come to the fore.
Leaders likely will -- and should -- discuss what to do about the enormous human tragedy that has been unfolding in Syria, and related regional geopolitical shifts. Here, important political differences have already emerged among certain G-8 countries even before the start of the Summit.
This week's meaningful initiation of trade negotiations between the European and the United States is also important, albeit from a medium-term perspective. Yet this encouraging initiative is already being undermined by some premature bilateral posturing.
So, despite Prime Minister Cameron's best efforts, most expect that, especially when it comes to economic issues, this Summit will again be big on proclamation but risks being largely ineffectual when it comes to immediate measures that make a difference on the ground.
Not so for the Federal Reserve where even a bland outcome can make a difference.
Western central banks in general, and the Fed in particular, have been at the forefront of efforts to revive economic growth, create jobs, and maintain financial stability. Lacking the support of other policymaking entities, they have courageously taken on important policy objectives with imperfect and highly experimental tools. As such, there is genuine uncertainty today about the future evolution of the cost-benefit equation, and what this means both for the willingness of central bankers to stay the course and for their current and future effectiveness.
In addition to listening to the Fed's assessment of economic developments and the outlook, many will look on Wednesday for three specific issues: whether the institution still intends to "taper" the exceptional support it provides markets and the economy; how concerned officials are about the "cost and risks" of their policy experimentation; and whether the negative global side effects are registering inside this important policy deliberating committee.
I suspect that the Fed will attempt to walk back on its tapering narrative, recognize but downplay the collateral damage and unintended consequences of its experimental policy stance, and convey little about negative global externalities.
I also suspect that, whether in the official statement or in the remarks that follow, officials will again call for support from other policymaking entities. And the great irony will be that this call well follow a disappointing communique from the G-8.
This week will likely be another reminder of the world's unbalanced economic policy mix. Central banks are committed, but limited by partial and imperfect tools. Others that can deliver the required policy complement are politically constrained at both the national and multilateral levels.
Until this basic imbalance is corrected, global growth and employment will fall short of what is both required and possible; and markets will lack the sustained underpinnings of strong fundamentals.
Mohamed A. El-Erian is the CEO and co-chief investment officer of PIMCO.
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