A "Rising Risk" of a Double-Dip Recession

Washington's Blog, September 10, 2009

Roubini: The World Faces a "Rising Risk" of a Double-Dip Recession

Nouriel Roubini recently told The Financial Times (as summarized by Huffington Post):

The world faces a "rising risk" of a double-dip recession.

Roubini's increasingly vocal about the risk of a recession relapse in the past few weeks...

"I do agree with the consensus that we'll have a couple of quarters of strong economic growth. The question is whether the medium-term growth is going to be V-shaped a return to potential or anemic growth below potential. My view of it is that it's going to be anemic."

Towards the end of next year, Roubini added, advanced economies could face a tough choice. Namely, if governments withdraw fiscal and monetary stimulus too early, the economy could fall back into another recession. On the other hand running up large deficits could lead to stagflation.

(Watch the FT interview here).

Roubini joins Joseph Stiglitz and many other economists and financial analysts in warning of a double-dip.