Nobel-winning economist Krugman warns that a U.S. recession looms in 2019

Nobel-winning economist Krugman warns that a U.S. recession looms in 2019

Nobel laureate Paul Krugman says he sees a good chance of a recession hitting the U.S. within a year.

Krugman said the fact that policymakers, including the Federal Reserve and the European Central Bank, don’t have room to respond to a downturn also could be a factor that worsens a downturn that hits Europe and Asia and bleeds over into the U.S.

There seems to be an accumulation of smaller problems and the underlying backdrop is that we have no good policy response. The Fed can’t cut rates very much. Fiscal policy...there is, in fact, fiscal space, if we were prepared to use it, but it’s hard to see that this current leadership is going to respond in any nimble way. So, yeah, I’d say there’s better than even odds that we will have a recession, Krugman said.

The euro area is clearly experiencing a slowdown pretty close to recessionary levels already and has no recourse. Draghi can’t cut rates because they’re negative already ...so I think Europe is a danger spot that is potentially as big as China, said the economist, referring to the ECB’s President Mario Draghi and that central bank’s stimulus measures rolled out to address the 2007-’09 financial crisis.

11 Feb 19 (Mon)

01:31 pm



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