Nobel Prize-winning economist Joseph E. Stiglitz has a chilling warning for world leaders as they scramble to respond to the novel coronavirus. COVID-19, he says, could lead to a worse economic crisis than that of 2008.
“The current crisis is more complicated. It is not a financial crisis, but a real crisis affecting the supply and demand system. Monetary policy alone will not be enough because interest rates in Europe are already low, close to zero. It’s the same thing in the United States.
The pandemic, said the Columbia University professor, will deliver a shock to both supply and demand, pointing out that an increase in demand can’t be the answer if the supply chain is broken.
The economist, who has written several books including last year’s People, Power, and Profits: Progressive Capitalism for an Age of Discontent, thinks, however, that the coronavirus is an emergency that could also give us positive lessons, if we know how to learn them. This includes the importance of countries staying connected in the age of globalization, collective action and science.
Above all, he argues, it is an emergency that is not good for the far right, “which has a basic philosophy not suited to respond to a challenge like this”, and could also stop Donald Trump in the next US presidential elections.
