Robert Shiller, the Yale University professor and economist, said experts should take a closer look at the economic stimulus, CNBC reported.
Inflation and increasing national debt shouldn’t be seen as immediate concerns.
Instead, he’s worried that the recent increase in confidence hasn’t resulted in the economy seeing any real gains, he said.
That rise in confidence could disappear if investors don’t see any changes made in the economy.
Shiller said the theory about green shoots seems good, but could change soon, The Economic Times reported.
"The metaphor sounds encouraging," he said. "It sounds like spring is here. And when spring starts, you know, it's gonna keep going. But the problem is a lot of these green shoots that we see could easily reverse themselves. Notably confidence, we've seen a surge in confidence."
Shiller, who wrote a book about the theory, called "Animal Spirits," said economic data could quickly reverse.
"Good things are here,’’ he said. “Things blown in on the wind are looking good at the moment."
Investors will be affected by increasing mortgage rates, Shiller said.
"Well, I think, there is a big psychological impact because people see these rising rates as a sign of trouble. That the government is borrowing heavily and now the borrowing rates are going up,’’ the economist said.
“It also has an impact on people’s willingness to buy homes. And the oil price is the most significant down news offsetting this green shoot news.’’
Billionaire investor Warren Buffett said a second economic stimulus package may be necesssary, since it appears that unemployment will continue to climb.
“It looks like we’re going to need more medicine, not less,” Buffett said in a Bloomberg interview.
“We’re going to have more unemployment. The recovery really hasn’t gotten going.”
© 2017 Newsmax. All rights reserved.