Tags: Rogoff | US | financial | Danger | economy | ben | bernanke

Rogoff: US Isn't Out of Financial Danger Just Yet

Thursday, 28 Apr 2011 08:28 AM

The United States has still not emerged from the financial crisis of the last couple of years as evidenced by high unemployment rates and modest economic growth, says Kenneth Rogoff, a professor of economics at Harvard University and former chief economist of the International Monetary Fund.

"We haven't really fully come out of the financial crisis yet. Unemployment is still near 9 percent, there are roughly 13-14 million people unemployed," Rogoff tells the BBC.

"Things aren't getting better quickly. It's very, very slow healing."
Government stimulus programs, meanwhile, are fueling an already anxious public.

KennethRogoff200ap.jpg
Kenneth Rogoff
(AP photo)
"People look over at Washington and they see it piling up these deficits," Rogoff says.

"And at the same time, they know that the government is doing all this stimulus through monetary policy, through fiscal policy, that's got to end. And they wonder, is this going to be a self-sustaining recovery? So, people are anxious."

Federal Reserve officials are in no rush to end current loose monetary policies, as in their view, inflation remains in check and weak unemployment warrants stimulus spending.

The Fed has cut its growth estimate for 2011 to somewhere between 3.1 percent and 3.3 percent from the 3.4 percent to 3.9 percent it predicted in January.

Federal Reserve Chairman Ben Bernanke, however, says the slower-than-expected economic growth is nothing permanent.

"I would say that roughly most of the slowdown in the first quarter is viewed by the committee as being transitory," Bernanke says, according to Reuters.

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The United States has still not emerged from the financial crisis of the last couple of years as evidenced by high unemployment rates and modest economic growth, says Kenneth Rogoff, a professor of economics at Harvard University and former chief economist of the...
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2011-28-28
 

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