Monday, September 20, 2010
ISTANBUL - Hürriyet Daily News
 John Van Reenen received the Yrjö Jahnsson Award in 2009. The honor is bestowed every two years on a select economist in Europe under the age of 45. DAILY NEWS photo, Hasan ALTINIŞIK |
There is a high possibility that a second economic dip in the U.S. economy could occur, triggering a “snowball effect” throughout the rest of the world, according to a prominent London-based economist.
“If someone had asked me about the direction of the economy eight months ago, I would have said the risk had receded,” John Van Reenen, the director of the London-based Centre for Economic Performance, an applied economics research center, recently told the Hürriyet Daily News & Economic Review.
“But now, looking at recent data, I am much concerned that we may have a second dip and go back to a recession again.”
Van Reenen received the Yrjö Jahnsson Award last year, awarded every two years to a select economist in Europe under the age of 45. “There is still a chance to get through the crisis but recently, the probability of the recession has increased,” he said.
Noting the rising unemployment throughout the world, he said nearly 100,000 people are expected to lose their jobs in the United States due to the economic crisis just this quarter.
“Unfortunately, the U.S. economy is not recovering as fast as in previous quarters in recent quarters,” he said. “The current economic downfall in the United States, the engine of the world, could easily affect the rest of the world.”
Long-term unemployment started to develop in the U.S. in the early 1980s and the 1990s, he said.
Noting that such unemployment has a crucial significance among Western countries, he said the long-term unemployment causes many to lose their skills.
The German miracle
He said Germany has been among the few countries that posted growth, adding that the “German miracle” had strongly contributed to signs of a recovery from the crisis.
Nonetheless, the rest of the Europe, especially Greece and Spain, are still struggling with low growth, high debt and rising foreign account deficits, he said.
Many countries have cut down expenses and hiked taxes, Van Reenen said, adding that these precautions should have been applied in the long run, “rather than enforcing the rules instantly over people,” which could “drive us back to a second dip.”
China and India are already on the top of list with their high growth rates, Van Reenen said. “The world is going through an axis shift which makes China and India the new engines of the global economy.”
Asian countries also showed a better resistance toward the global crisis, he said.
Van Reenen said some European countries already had structural financial problems, which were “invisible during the happy days before the global economic crisis.”
“Now the tide has receded and we are seeing all the wreckage,” he said. “In the short run, Greece will rely on the European Union and the solution might only be structural reforms in the country. Being honest, the possibility of diving into another crisis for Greece is pretty high.”
Evaluating Europe’s handling of the crisis so far, Van Reenen said the coordination throughout the continent had been very loose. “If Greece was the only country that faced a crisis, the best thing would have been debt restructuring, but there are also other countries such as Portugal, Spain and Ireland.”
Noting the rising importance of Turkey in recent years, Van Reenen said full Turkish membership in the European Union could bring the energy and the dynamism needed for the European economy while also providing Turkey “a seat at the table in terms of the rules that govern the whole of Europe.”
“If someone had asked me about the direction of the economy eight months ago, I would have said the risk had receded,” John Van Reenen, the director of the London-based Centre for Economic Performance, an applied economics research center, recently told the Hürriyet Daily News & Economic Review.
“But now, looking at recent data, I am much concerned that we may have a second dip and go back to a recession again.”
Van Reenen received the Yrjö Jahnsson Award last year, awarded every two years to a select economist in Europe under the age of 45. “There is still a chance to get through the crisis but recently, the probability of the recession has increased,” he said.
Noting the rising unemployment throughout the world, he said nearly 100,000 people are expected to lose their jobs in the United States due to the economic crisis just this quarter.
“Unfortunately, the U.S. economy is not recovering as fast as in previous quarters in recent quarters,” he said. “The current economic downfall in the United States, the engine of the world, could easily affect the rest of the world.”
Long-term unemployment started to develop in the U.S. in the early 1980s and the 1990s, he said.
Noting that such unemployment has a crucial significance among Western countries, he said the long-term unemployment causes many to lose their skills.
The German miracle
He said Germany has been among the few countries that posted growth, adding that the “German miracle” had strongly contributed to signs of a recovery from the crisis.
Nonetheless, the rest of the Europe, especially Greece and Spain, are still struggling with low growth, high debt and rising foreign account deficits, he said.
Many countries have cut down expenses and hiked taxes, Van Reenen said, adding that these precautions should have been applied in the long run, “rather than enforcing the rules instantly over people,” which could “drive us back to a second dip.”
China and India are already on the top of list with their high growth rates, Van Reenen said. “The world is going through an axis shift which makes China and India the new engines of the global economy.”
Asian countries also showed a better resistance toward the global crisis, he said.
Van Reenen said some European countries already had structural financial problems, which were “invisible during the happy days before the global economic crisis.”
“Now the tide has receded and we are seeing all the wreckage,” he said. “In the short run, Greece will rely on the European Union and the solution might only be structural reforms in the country. Being honest, the possibility of diving into another crisis for Greece is pretty high.”
Evaluating Europe’s handling of the crisis so far, Van Reenen said the coordination throughout the continent had been very loose. “If Greece was the only country that faced a crisis, the best thing would have been debt restructuring, but there are also other countries such as Portugal, Spain and Ireland.”
Noting the rising importance of Turkey in recent years, Van Reenen said full Turkish membership in the European Union could bring the energy and the dynamism needed for the European economy while also providing Turkey “a seat at the table in terms of the rules that govern the whole of Europe.”
Hiç yorum yok:
Yorum Gönder