Developed countries are ill-equipped for another recession, says economist
Sintra/Tokyo — Former US treasury secretary Lawrence Summers has warned that developed countries are badly equipped for another recession, both economically and politically, and central banks should be wary of raising interest rates just to control inflation. "The issue that’s pre-occupied monetary policy for the generation before the financial crisis — the avoidance of inflation — is no longer the top issue," Summers said in a Bloomberg Television interview with Stephanie Flanders on Tuesday. It was the "maintenance of sound growth and getting to full employment". The remarks come as the world’s most powerful monetary policy makers start scaling back the extraordinary levels of support they’ve lent their economies since the financial crisis a decade ago. Summers was echoing comments he made late on Monday, at the opening of an event in Portugal that brings together some of those figures, including US Federal Reserve chairman Jay Powell and European Central Bank (ECB) president Mari...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.