The former US Treasury Secretary under Bill Clinton recommends that the new federal government keep an eye on the necessary investments in the future.
(Photo: © 2016 Bloomberg Finance LP)
Berlin Larry Summers loves to think against the grain. At the beginning of the year, the actually left-liberal Harvard economist criticized the first economic stimulus program of the then newly elected US President Joe Biden as being completely excessive and warned of a wave of inflation.
This has earned him a lot of applause from more conservative politicians and economists in Europe as well. “I believe that inflation risks in the US and globally are underestimated,” warns Summers, drawing parallels with the situation in the late 1960s, when inflation expectations gradually built up, which shortly afterwards plunged the global economy into a long phase of stagflation.
In an interview with the Handelsblatt, however, Summers warns the Europeans against a hasty change of course in financial policy and a shift towards austerity. “Now is not the right time to give in to Germany’s traditional desire for an austerity policy,” says the 66-year-old.
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