{"id":1700789,"date":"2022-10-18T06:02:07","date_gmt":"2022-10-18T10:02:07","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1700789"},"modified":"2022-10-18T07:18:46","modified_gmt":"2022-10-18T11:18:46","slug":"be-ready-for-stagflationary-crisis-economist-roubini-warns","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/be-ready-for-stagflationary-crisis-economist-roubini-warns\/","title":{"rendered":"Be Ready for &#8220;Stagflationary Crisis,&#8221; Economist Roubini Warns"},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"&quot;\"><div class=\"counts mashsbcount\">16<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Fbe-ready-for-stagflationary-crisis-economist-roubini-warns%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1700789&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><p class=\"MsoNormal\">The U.S. and global economies might be embarking upon a new era of \u201cGreat Stagflation Instability,\u201d according to famed economist Nouriel Roubini, nicknamed \u201cDr. Doom\u201d for correctly predicting the 2008 financial crisis.<\/p>\n<p class=\"MsoNormal\">Roubini, a professor of economics at New York University\u2019s Stern School of Business, wrote an <a href=\"https:\/\/time.com\/6221771\/stagflation-crisis-debt-nouriel-roubini\/\">opinion piece<\/a> for Time magazine, in which he warned that the inflationary pressures that have popped up worldwide over the past year are unlikely to be a short-term challenge.<\/p>\n<p class=\"MsoNormal\">He thinks that the shocks hitting the economy could originate from the supply side rather than from evolving demand, much like what occurred during the 1970s amid two negative oil shocks. When this occurs, energy and production costs skyrocket, resulting in lower economic growth for countries that import fuel and food, triggering an environment of high inflation and a possible recession.<\/p>\n<p class=\"MsoNormal\">\u201cIf the response to this negative supply shock is loose monetary and fiscal policy\u2014banks setting low interest rates to encourage borrowing\u2014to prevent the slowdown in growth, you feed the inflation flames by stimulating rather than cooling demand for goods and labor,\u201d he wrote. \u201cThen you end up with persistent <a href=\"https:\/\/www.theepochtimes.com\/t-stagflation\">stagflation<\/a>: a recession with high inflation.\u201d<\/p>\n<p class=\"MsoNormal\">Many economists and market analysts have been warning about such an economic climate of high inflation and anemic growth.<\/p>\n<p> <a href=\"https:\/\/img.theepochtimes.com\/assets\/uploads\/2022\/09\/1.tagreuters.com2022binary_LYNXMPEI8707Y-FILEDIMAGE-1200x800.jpg\"><\/a> The Federal Reserve Board building on Constitution Avenue in Washington, on Mar 27, 2019. (Brendan McDermid\/File Photo\/Reuters) <\/p>\n<p class=\"MsoNormal\">During the cost-of-living crisis of the 1970s and early 1980s, inflation problems were addressed by a double-dip recession in 1980 and 1981\u201382 and then-Federal Reserve Chair Paul Volcker approving double-digit rate hikes. This eventually led to the Great Moderation for about 30 years: low inflation, stable growth, appreciating values, low bond yields, and short and shallow recessions.<\/p>\n<p class=\"MsoNormal\">Is the United States now transitioning from the Great Moderation period to an era of the Great Stagflation? The answer to this question might depend on how other questions are answered, Roubini notes.<\/p>\n<p class=\"MsoNormal\">For example, will inflation be persistent? Will central banks blink and reverse their tightening efforts? Will the next recession be \u201cshort and shallow\u201d or \u201csevere and protracted\u201d? How will the financial markets react to stagflation?<\/p>\n<p class=\"MsoNormal\">Meanwhile, Roubini writes, a hard landing for the national and international economies is increasingly becoming the baseline scenario for market observers, effectively abandoning the soft landing projections earlier this year. But while a recession might be inevitable, the founder of Roubini Global Economics thinks there could be \u201ca severe stagflationary debt crisis\u201d following the economic downturn.<\/p>\n<p class=\"MsoNormal\">\u201cAs a share of global GDP [gross domestic product], private and public debt levels are much higher today than in the past, having risen from 200 percent in 1999 to 350 percent today,\u201d he wrote. \u201cUnder these conditions, rapid normalization of monetary policy and rising interest rates will drive highly leveraged households, companies, financial institutions, and governments into bankruptcy and default.\u201d<\/p>\n<p class=\"MsoNormal\">In addition, all the usual tools to mitigate a recession or diminish the effects of a downturn are limited, particularly because \u201cpublic debts are becoming unsustainable.\u201d<\/p>\n<p class=\"MsoNormal\">In the end, Roubini<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The U.S. and global economies might be embarking upon a new era of \u201cGreat Stagflation Instability,\u201d according to famed economist Nouriel Roubini, nicknamed \u201cDr. Doom\u201d for correctly predicting the 2008 financial crisis. Roubini, a professor of economics at New York University\u2019s Stern School of Business, wrote an opinion piece for Time magazine, in which he &hellip;<\/p>\n","protected":false},"author":1,"featured_media":1898750,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","fifu_image_alt":"","footnotes":""},"categories":[547],"tags":[],"class_list":["post-1700789","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-the-bongino-report"],"fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1700789","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=1700789"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1700789\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/1898750"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=1700789"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=1700789"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=1700789"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}