Krugman: Worst is over
By Eileen Ng |
August 11, 2009, Tuesday
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Print Edition
Print Edition
AGGRESSIVE stimulus spending by governments helped the world avoid a second Great Depression but full economic recovery will take two years or more, Nobel Prize-winning economist Paul Krugman said yesterday during the two-day World Capital Markets Symposium in Kuala Lumpur, Malaysia.
Krugman said the worst of the global crisis was over with economic and exports growth showing signs of stabilization. Still, recovery was likely to be "disappointing" as government spending wasn't sustainable in the long run and the unemployment rate still lags behind, he told the conference, which ends today.
There isn't likely to be any "Phoenix-like" recovery such as in the 1997-98 Asian financial crisis, where economies expanded quickly, led by a sharp rebound in exports, he said.
"We have managed to avoid a second Great Depression ... but full recovery is at least two years and probably more," Krugman said.
Asia is likely to see a faster rebound, than the US and Europe, he said. In the clearest sign yet that the recession may be ending, the US Labor Department said last Friday the jobless rate dipped for the first time in 15 months.
Krugman said the worst of the global crisis was over with economic and exports growth showing signs of stabilization. Still, recovery was likely to be "disappointing" as government spending wasn't sustainable in the long run and the unemployment rate still lags behind, he told the conference, which ends today.
There isn't likely to be any "Phoenix-like" recovery such as in the 1997-98 Asian financial crisis, where economies expanded quickly, led by a sharp rebound in exports, he said.
"We have managed to avoid a second Great Depression ... but full recovery is at least two years and probably more," Krugman said.
Asia is likely to see a faster rebound, than the US and Europe, he said. In the clearest sign yet that the recession may be ending, the US Labor Department said last Friday the jobless rate dipped for the first time in 15 months.
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