Harvard economist Ken Rogoff, former Economic Counselor and Director of Research Department for the International Monetary Fund, sees more headwind ahead.
"It's hard to see the kind of robust recovery that's really going to generate the 10, 11 million jobs that we need to get back to where we were before it started," Rogoff told Tech Ticker.
A glance at the U.S. economy feels very déjà vu now, Rogoff says.
“Can I tell you what month the stock market is going to go up and what month it’s going to go down? No. But the broad contours are really eerily similar to the average of past post-war crises.”
“It’s different than a normal recession in that it’s all more drawn out.”
Rogoff sees employment coming back “very slowly” during the next two to three years.
“I expect unemployment to get worse before it gets better,” he says: The total amount of money going to workers in nominal terms — salaries times hours — may not come back into its peak until late in 2011.
“Housing, I think, will get worse more likely than better,” Rogoff says, noting that current housing-market supports “will have to fade” as time goes by.
However, he adds, stock markets usually return to peak levels two or three years after a crisis, as investors opt for riskier investments amid near-zero interest rates.
According to Zillow.com, nearly half a trillion dollars evaporated this year as the housing market continued in free-fall mode.
The country still did better than last year, when housing values tanked by $3.6 trillion.
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