The U.S. unemployment rate could reach 10 percent without a "very effective" stimulus package, 2008 Nobel economics prize winner Paul Krugman said Monday.
Krugman, who will receive the award this week, also warned that the global economy could be stuck in recession for more than two years if no strong measures are taken.
"We could easily be looking at a world economy that is depressed until 2011 and maybe beyond," the Princeton University professor and New York Times columnist told reporters in Stockholm.
Krugman said the U.S. economy needs a stimulus package of at least $600 billion, or 4 percent of gross domestic product.
"That's actually modest," Krugman said. "That's not enough to prevent a further decline of the economy. It is enough to prevent a sharp decline."
He said as much of the recovery plan as possible should focus on infrastructure "because that at least will leave us with things of value afterwards."
Policy-makers need to take some chances, he said, "including chances of misspent money," to keep the crisis from evolving into another Great Depression.
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