Krugman Expands Upon 2010 Recession Risk Statement
PK: 30% - 40% odds of technical recession in second half, better than even odds of "growth recession."
From Bloomberg:
Krugman Sees 30-40% Chance of U.S. Recession in 2010
Jan. 4 (Bloomberg) -- Nobel Prize-winning economist Paul Krugman said he sees about a one-third chance the U.S. economy will slide into a recession during the second half of the year as fiscal and monetary stimulus fade.
“It is not a low probability event, 30 to 40 percent chance,” Krugman said today in an interview in Atlanta, where he was attending an economics conference. “The chance that we will have growth slowing enough that unemployment ticks up again I would say is better than even.”
Krugman, 56, said growth will slow as the Federal Reserve ends purchases of securities, the Obama administration’s $787 billion stimulus program winds down and companies stop rebuilding depleted stockpiles.
The Princeton University professor joined Harvard’s Martin Feldstein and Columbia’s Joseph Stiglitz, another Nobel laureate, in sounding an alarm for the world’s largest economy during the annual meeting of the American Economic Association. Feldstein yesterday called the fading stimulus “a serious cloud,” and Stiglitz said growth won’t be “robust” soon.
While inventory rebuilding may have raised U.S. growth to a more than 4 percent annual pace in the fourth quarter, this year’s rate will be “more like 2 percent,” with the risk of outright declines late in the year, Krugman said. Unemployment “ends the year a little higher than it began,” Krugman said...
From Bloomberg:
Krugman Sees 30-40% Chance of U.S. Recession in 2010
Jan. 4 (Bloomberg) -- Nobel Prize-winning economist Paul Krugman said he sees about a one-third chance the U.S. economy will slide into a recession during the second half of the year as fiscal and monetary stimulus fade.
“It is not a low probability event, 30 to 40 percent chance,” Krugman said today in an interview in Atlanta, where he was attending an economics conference. “The chance that we will have growth slowing enough that unemployment ticks up again I would say is better than even.”
Krugman, 56, said growth will slow as the Federal Reserve ends purchases of securities, the Obama administration’s $787 billion stimulus program winds down and companies stop rebuilding depleted stockpiles.
The Princeton University professor joined Harvard’s Martin Feldstein and Columbia’s Joseph Stiglitz, another Nobel laureate, in sounding an alarm for the world’s largest economy during the annual meeting of the American Economic Association. Feldstein yesterday called the fading stimulus “a serious cloud,” and Stiglitz said growth won’t be “robust” soon.
While inventory rebuilding may have raised U.S. growth to a more than 4 percent annual pace in the fourth quarter, this year’s rate will be “more like 2 percent,” with the risk of outright declines late in the year, Krugman said. Unemployment “ends the year a little higher than it began,” Krugman said...