Joseph Stiglitz, a Nobel Memorial Prize in Economic Sciences professor at Columbia University, predicted that US financial authorities would fail to curb inflation and acknowledged that the US economy needed supply-side intervention rather than rate hikes.
He attended the World Economic Forum in Davos, Switzerland. “Rising rates won’t solve the problem of inflation,” he said in an interview with Bloomberg Television. “A rate hike does not increase food. It makes the situation more difficult because it makes it impossible to invest.”
Interview with Professor Stiglitz on Bloomberg Television
Source: Bloomberg
“What is needed is supply-side intervention,” Stiglitz said. “One of the things President Biden tried to do was expand child care, which meant increasing women’s participation in the workforce. One of the supply constraints will be relaxed. “
He argued that food production should also be a priority in the United States and around the world. “The United States used to have a surplus of food, and it is possible to return to that state,” he said. “At least trying everything we can do globally to expand supply is more regarding dealing with the problem than causing a recession,” he said.
“Killing the economy through rate hikes will not solve the inflation problem in any time frame,” he added.
Original title:Stiglitz Says US Rate Hikes Killing Economy Won’t Fix Inflation(excerpt)
