Princeton University professor and Nobel Prize-winning economist Paul Krugman told a small group of reporters during a visit to Beijing, that the U.S. risks a Japan-style lost decade of growth if it does not take aggressive action to stimulate its economy and clean up its banking system.
From Reuters: “We’re doing half-measures that help the economy limp along without fully recovering, and we’re having measures that help the banks survive without really thriving…We’re doing what the Japanese did in the nineties,” Krugman said.
Krugman also said he expects little or no employment growth this year or next in the U.S. and expressed concerns that “the U.S. and the euro zone will have Japanese-type lost decades.”
“It’s clear the administration won’t take radical action to strengthen the banks any time soon,” he said.
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