JERUSALEM (Steven Scheer) - The economy is unlikely to return to recession provided there are no shocks on oil prices, U.S. housing or mishandling of the European debt crisis, former White House aide Larry Summers said on Wednesday.
Speaking at a conference in Jerusalem, Summers -- a Harvard professor and former Treasury secretary under President Bill Clinton -- said the odds were low there would be a double dip recession.
"The expectation is that U.S. growth will continue at 2 to 3 percent the rest of the year," said Summers, adding global growth would be faster due to strong emerging markets.
The ex-White House economist said shocks to commodities prices, particularly oil due to unrest in the Middle East, could hurt growth prospects.
At the same time, there were also risks to the economy in the event of a mishandling of the European debt crisis and if the U.S. housing market stays weak, Summers said.
He also compared China to Japan in the 1980s, saying the country had a managed currency, low productivity, easy money and inflated assets.
While China is not expected to follow the collapse of Japan's economy, Summers said it was "a possibility."
"If these became a reality in a major way, they could impact on the totality of the global economy," he said. "China, U.S. housing, commodities and mishandling of Europe are four things I would watch against a forecast of continued growth."
Summers said that while the center of gravity of the global economy is shifting eastward, the United States will remain a global economic power.
"When the world's financial markets were in distress the assets people rushed into were U.S. dollar assets in general and U.S. Treasury bonds in particular," he said.
That, along with massive government intervention to rescue the banking and auto industries, allowed the United States to recover faster than other countries.
"This was the economic equivalent of the Cuban Missile Crisis," Summers said.
Still, U.S. "growth has not been as rapid as hoped. It's slower than I and other observers had expected six, nine months ago," he said. "But it is growing faster than most of the industrial world."
"It's not likely that the next few years will be the most rapid growth we have ever seen. Overhang of excessive levels or capital and excessive debt make that unlikely."
(Editing by Chizu Nomiyama)
Copyright 2011 Thomson Reuters. Click for Restrictions.
Support HuffPost
Our 2024 Coverage Needs You
Your Loyalty Means The World To Us
At HuffPost, we believe that everyone needs high-quality journalism, but we understand that not everyone can afford to pay for expensive news subscriptions. That is why we are committed to providing deeply reported, carefully fact-checked news that is freely accessible to everyone.
Whether you come to HuffPost for updates on the 2024 presidential race, hard-hitting investigations into critical issues facing our country today, or trending stories that make you laugh, we appreciate you. The truth is, news costs money to produce, and we are proud that we have never put our stories behind an expensive paywall.
Would you join us to help keep our stories free for all? Your contribution of as little as $2 will go a long way.
Can't afford to donate? Support HuffPost by creating a free account and log in while you read.
As Americans head to the polls in 2024, the very future of our country is at stake. At HuffPost, we believe that a free press is critical to creating well-informed voters. That's why our journalism is free for everyone, even though other newsrooms retreat behind expensive paywalls.
Our journalists will continue to cover the twists and turns during this historic presidential election. With your help, we'll bring you hard-hitting investigations, well-researched analysis and timely takes you can't find elsewhere. Reporting in this current political climate is a responsibility we do not take lightly, and we thank you for your support.
Contribute as little as $2 to keep our news free for all.
Can't afford to donate? Support HuffPost by creating a free account and log in while you read.
Dear HuffPost Reader
Thank you for your past contribution to HuffPost. We are sincerely grateful for readers like you who help us ensure that we can keep our journalism free for everyone.
The stakes are high this year, and our 2024 coverage could use continued support. Would you consider becoming a regular HuffPost contributor?
Dear HuffPost Reader
Thank you for your past contribution to HuffPost. We are sincerely grateful for readers like you who help us ensure that we can keep our journalism free for everyone.
The stakes are high this year, and our 2024 coverage could use continued support. If circumstances have changed since you last contributed, we hope you’ll consider contributing to HuffPost once more.
Support HuffPostAlready contributed? Log in to hide these messages.