Nouriel Roubini: Global Economy Will Continue To Stagnate But No Recession
Tuesday June 28, 2016 10:14
(Kitco News) - For an economist who has earned the nickname “Dr. Doom,” Nouriel Roubini’s outlook on the global economy isn’t as grim as one would expect.
Image courtesy of World Economic Forum
Tuesday, as part of a panel at a World Economic Forum event in Tianjin, China, Roubini said that there is only limited risk of a global recession and new financial crisis as a result of the Brexit vote last week.
However, the economic professor at the Leonard N. Stern School of Business, New York University also isn’t very rosy as he expects that “Mediocre growth is the new norm.” Roubini said that he expects the global economy to continue to stagnate.
“Traditional monetary and fiscal policies have lost their efficacy to jumpstart anemic economies, and structural reforms have been constrained by politics,” he said.
Roubini noted that the Brexit vote is just one symptom of a global system that is breaking down. He also noted that the growing support for fringe political groups in Europe and the rise of populist politicians like Donald Trump and Senator Bernie Sanders are other symptoms of growing frustration as not all segments of society benefit from globalization.
“What we saw in the UK referendum was a division between rich and less rich, young and old, skilled and less skilled. This kind of pressure is becoming severe,” he said. “Look at the United States: you have Donald Trump representing the angry white blue-collar worker, and Bernie Sanders for both angry white- and blue-collar workers.”