Krugman: Rapid Recovery ‘Extremely Unlikely’

Bloomberg:

Princeton University’s Nobel Prize-winning economist, said global economic prospects don’t justify the two-month rally that has restored $8.9 trillion to stock markets around the world.

Speculation government spending packages and interest-rate cuts worldwide will reinvigorate the global economy has helped the MSCI World Index rally 37 percent since falling to its lowest since 1995 on March 9. The U.S. Standard & Poor’s 500 Index surged 34 percent in that time.

“It looks to me now as if the markets are now pricing in a rapid recovery, that they’re pricing in a V-shaped recession, which I consider extremely unlikely,” Krugman, 56, said at a forum in Shanghai today. “The market seems to be looking as if this is going to be an average recession, but it’s not.”

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Source:
Paul Krugman Says Rapid Recovery ‘Extremely Unlikely’
Patrick Rial and Stephanie Wong
Bloomberg, May 12 2009
http://www.bloomberg.com/apps/news?pid=20601087&sid=aE0mkwMWHxQs&

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