World recovering from financial crisis: Paul Krugman
Published on Mon, Aug 10, 2009 at 13:41 | Source : CNBC-TV18
Updated at Mon, Aug 10, 2009 at 18:42
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World recovering from financial crisis: Paul Krugman
Nobel Laureate and Professor of Economics Princeton University Paul Krugman said the world may be in recovery mode though, given the state in west, it does not look like it yet.
Nobel Laureate and Professor of Economics at Princeton University Paul Krugman said the world may be in recovery mode though, given the state in west, it does not look like it yet.
"In the US, we are still losing jobs but at a much slower pace," Krugman said. "Manufacturing production appears to stabilizing worldwide though it's not growing much. The purchasing managers induces (PMIs) are showing growth in some places."
Even as experts say inflation see an unprecedented rise due to the money being pumped into various global economies by stimulate demand, Krugman said there was no sign of inflation happening yet. "When you put in money into the system, it mostly just sits there. It is quite easy to pull it out again if inflation starts to rise," he said. "But the real challenge is that you announce an inflation target and you fail to achieve it."
Krugman added that China would be the world's most dominant economy a generation from now but it was still not big enough to serve a locomotive for growth. "China has poured in stimulus at a speed that no one has been able to match, they are able to do that because they dont worry about corruption and misuse of funds, they just force it - whether it is sustainable on their part is a different thing."
