Larry Summers: Wake up to the dangers of a deepening crisis

Posted by Kendall Harmon

Three months ago it was reasonable to expect that the subprime credit crisis would be a financially significant event but not one that would threaten the overall pattern of economic growth. This is still a possible outcome but no longer the preponderant probability.

Even if necessary changes in policy are implemented, the odds now favour a US recession that slows growth significantly on a global basis. Without stronger policy responses than have been observed to date, moreover, there is the risk that the adverse impacts will be felt for the rest of this decade and beyond.

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Filed under: * Economics, PoliticsEconomy

Posted November 26, 2007 at 9:25 am [Printer Friendly] [Print w/ comments]

1. William P. Sulik wrote:

On the other hand (or other Larry [Kudlow]):

It looks like Ben Bernanke & Co. are dissing high oil and gold prices and the sagging dollar as influences on future inflation. Instead they basically see 2 percent inflation — both headline and core — in 2008, 2009, and 2010. The Fed also sees Goldilocks-type economic growth — not too hot, not too cold — for the next three years.

While Kudlow tends to be way too partisan Republican for me—he does appear to have been right about “Main Street rescuing Wall Street” in the subprime crisis:

November 26, 11:42 am | [comment link]
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