Are we in for a double-dip recession? Economist Nouriel Roubini, the president of RGE Monitor who's often referred to as "Dr. Doom," recently sat down with Martin Wolf of The Financial Times, and said that the world faces a "rising risk" of a double-dip recession.
Roubini's increasingly vocal about the risk of a recession relapse in the past few weeks. Earlier this year, he warned of a "perfect storm of rising oil prices, rising taxes and rising nominal and real interest rates on the public debt of many advanced economies."
In his interview with The Financial Times, Roubini was similarly pessimistic:
"I do agree with the consensus that we'll have a couple of quarters of strong economic growth. The question is whether the medium-term growth is going to be V-shaped a return to potential or anemic growth below potential. My view of it is that it's going to be anemic."
Towards the end of next year, Roubini added, advanced economies could face a tough choice. Namely, if governments withdraw fiscal and monetary stimulus too early, the economy could fall back into another recession. On the other hand running up large deficits could lead to stagflation. To combat booming budget deficits, Roubini also called for world governments to commit to a "phase-in" tax increase that would be rolled out once the economy recovers.
Watch the entire interview with Nouriel Roubini at The Financial Times.
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