Greenspan sees re­turn of stagfla­tion un­seen since 1970s

Muscat Daily - - BUSINESS -

New York, US - Lit­tle to slow growth and ris­ing in­fla­tion? That’s what’s in store for the US econ­omy, ac­cord­ing to Alan Greenspan.

The for­mer Fed­eral Re­serve chair­man told Bloomberg the era of slug­gish ex­pan­sion with­out any mean­ing­ful in­crease in in­fla­tion is bound to end - not with an ac­cel­er­a­tion in growth, but with faster price gains. In other words, stagfla­tion is on the hori­zon and that bodes poorly for the Ameri- can econ­omy.

“We’ve been in a pe­riod of stag­na­tion since 2008 as a con­se­quence of the sharp de­cline of cap­i­tal in­vest­ment and pro­duc­tiv­ity growth,” Greenspan said dur­ing a tele­phone in­ter­view. “But stagfla­tion is about to emerge. We are mov­ing into a dif­fer­ent phase of the econ­omy - to a stagfla­tion not seen since the 1970s - that is not good for as­set prices.”

Alan Greenspan

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