Joseph Stiglitz Interview on Economic Recovery

Joseph Stiglitz is interviewed by Bloomberg during a visit to Istanbul. Stiglitz believes markets are "irrationally exuberant" about the global recovery.

Bloomberg reports: His comments echo New York University Professor Nouriel Roubini’s view that “markets have gone up too much, too soon, too fast,” and billionaire George Soros, who warned yesterday that America’s economic recovery will be “very slow.”

The U.S. has lost 7.2 million jobs since the recession began in December 2007, and the unemployment rate reached a 26- year high in September, a Labor Department report last week showed. Joblessness is likely to reach 10 percent by the end of the year, according to economists surveyed by Bloomberg News last month.

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It’s “pretty clear that the situation will continue to get worse,” Stiglitz said, citing elements of the jobs report such as the number of people who can’t find a full-time job and the pace at which Americans are dropping out of the labor force.

Economic growth this year and next will “fall well short of what we need to stop unemployment from growing,” he said. The likelihood that the U.S. economy will be “out of the woods” before most of the measures in the Obama administration’s stimulus package expire in 2011 is “very small,” he added.

Source: Stiglitz Says Markets ‘Irrationally Exuberant’ About Recovery, Francine Lacqua and Jeremy Torobin, Bloomberg, October 6 2009