Apr 30, 2009 — There is a light at the end of the tunnel. However, that light is further away than most people realize. That was the general message delivered by Dr. Nouriel Roubini, the renowned economist who accurately predicted the current recession in 2006. Speaking to a capacity crowd at Yeshiva University’s (YU) Alexander Brody Distinguished Lecture in Economics, Roubini offered his outlook for the US and global economies and financial markets.
“Everyone agrees this is the worst financial crisis since the Great Depression,” said Roubini, professor of economics and international business at New York University (NYU) Stern School of Business. “The consensus view—the optimists—believe the worst is over and that we will start seeing positive growth in the second half of this year. My views are more bearish.”
Citing consumer shock, limited income, and falling industrial production and home sales, Roubini went on to declare that there are no clear signs that the recession has bottomed. “Unfortunately, my take is that things aren’t improving as quickly as the optimists say.” He argued that with economic growth in 2010 expected to be extremely weak, combined with growing unemployment, next year will feel like a recession as well.
“While I do agree that the rate of contraction won’t be as sharp as the last two quarters, we won’t reach positive growth by the end of the year,” said Roubini, who expects a “long, protracted and ugly global recession.”
The lecture followed a dinner and award ceremony for YU’s economics students. “This was a tremendous thrill for our students,” said Dr. Aaron Levine, the Samson and Halina Bitensky professor of economics at YU who has organized the Brody lecture for more than 30 years. “The lecture has always been a big event, but this one surpassed all others in the size of the audience and in the enthusiasm of its reaction. Professor Roubini is both the acknowledged prophet of the current meltdown and the foremost guru on how to reverse the collapse.”
Ending off his lecture on a somewhat optimistic note, Roubini believes the good news is that “we are going to avoid a near-depression” thanks to aggressive government policies. “I have been right until now, but it’s a very uncertain world and things can turn out better than I expect,” said Roubini, offering a glimmer of hope.
“Of course, there is also a chance that things will turn out worse than I expect.”