Global recession looms ahead, warns Nobel Prize Economist, Paul Krugman

Paul Krugman, Nobel Prize Laureate Economist

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On the back of growing protectionism and populist anti-trade sentiment, Krugman projects a recession late this year or next year

Monday 11, February 2019 BY MUZORIWA KUDAKWASHE

Paul Krugman, a Nobel Prize Laureate Economist, said that there is a good chance of a global recession late this year or next year.

The esteemed academic cited a general lack of preparedness among policymakers, saying the main concern has always been that there is no effective response if things slow down.

Speaking at the World Government Summit (WGS) 2019 Forum, Krugman noted that central banks often do not have the tools available to insulate against market turmoil and planning for the risk has been minimal.

Krugman instead, highlighted that trade wars and growing protectionism continue to dominate policy agendas, deferring attention and resources from what should be the real priorities.

The global economic landscape is said to be now dominated with stagnant wages, growing inequalities and a loss of confidence in the world’s business leaders – creating a spirited populist backlash against globalisation.

Additionally, Krugman also warned the policymakers against the calls of an impending ‘labour Armageddon’ at the hands of increasing digitalisation.

Krugman said that this is not a transformative revolutionary era, going against the notion that technological advancements in the last 25 years are transforming the way people work.

TAGS : WGS 2019 Forum, Global Recession , Paul Krugman

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