Summers former US Treasury Secretary [EPA = 연합뉴스]Former US Treasury Secretary Larry Summers, a world-renowned scholar, diagnosed the current unstable state of the global economy as similar to the state of August 2007, just before the global financial crisis.
“We are going through a period of increasing crisis,” Summers said in an interview with Bloomberg TV on the 29th (local time).
In the summer of 2007, the collapse of the housing market in the United States began due to an increase in bad mortgages (subprime mortgages), and the worst financial crisis since the Great Depression of 2008 occurred the following year.
Former Secretary of State Summers defined the uncertain economic situation as “we are seeing multiple oscillations just before an earthquake.” “Given the current risks, now is not the time for many firefighters to go on vacation,” he warned of a global crisis.
He referred to factors such as the weakening of the economic base, uncertainty in the economic policy outlook, concern about high inflation, volatility in raw materials, and geopolitical tensions related to Russia’s attack on Ukraine and China.
Former Secretary Summers said the UK’s recent economic turmoil was an example of a possible collapse. “The UK is a very complex and uncharted territory,” he said, pointing out that the key problem is a lack of confidence in the market for the sustainability of UK macroeconomic policies.
“The UK crisis could have more consequences,” said Summers.
The former Secretary of State Summers is a representative figure in the economics of the United States and is classified as a New Keynesian school where there is increased spending by the government. At the age of 27, he received his doctorate in economics from Harvard University and became the youngest tenured professor in the history of Harvard University. He served as Secretary of the Treasury during the Bill Clinton administration and then as chairman of the National Economic Council (NEC) during the Barack Obama administration. Since early last year, he has consistently warned of inflationary concerns from the Biden administration’s massive stimulus package.
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