Nobel laureate economist Joseph Stiglitz known as out President Donald Trump’s financial insurance policies, warning they danger inflicting stagflation — in any other case often known as excessive inflation, rising unemployment and stagnant financial development.
In an interview revealed by The Guardian on Monday, Stiglitz additionally argued the US is turning into “a scary place to take a position” due to Trump’s mission to slash public spending, which is shredding established contracts with the federal government and prompting fears of the dangers of doing enterprise in America.
Trump earlier this month introduced a 25% tariff on imports from Canada and Mexico and 10% on imports from China. The tariffs on Canada and Mexico have been nearly instantly paused however may nonetheless be reimposed in March. Final week, Trump unveiled reciprocal tariffs on different international locations globally, with every nation’s levy to be selected a person foundation.
“Virtually all economists agree that the tariffs will improve costs,” stated Stiglitz, a professor at Columbia College and former World Financial institution chief economist who received the Nobel Memorial Prize in Financial Sciences in 2001.
“I may actually see a state of affairs the place we get to stagflation — we get inflation and a weak financial system,” he added. “I can not see a very sturdy financial system as a result of I simply see the worldwide financial system struggling a lot from the uncertainty that Trump poses.”
Paul Krugman, the winner of the 2008 Nobel Memorial Prize, expressed comparable fears over Trump’s plan “to boost tariffs however reduce taxes on excessive earnings” final month.
A “lot of individuals” who voted for Trump final yr “are going to get brutally scammed,” he warned.
Final week, the annual inflation rate was reported to have risen to three% within the three months since Trump’s election win over Democratic rival Kamala Harris.
Trump repeatedly, during his 2024 campaign, promised that he would convey down costs on the primary day of his administration.
