Summers Warns the Biggest Economies Are Not Prepared for Another Recession
- Former Treasury secretary comments at ECB Forum in Portugal
- Conseqences of downturn would dwarf risk from higher inflation
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Former U.S. Treasury Secretary Lawrence Summers warned that developed countries are badly equipped for another recession, both economically and politically, and central banks should be wary of raising interest rates just to control inflation.
“The issue that’s preoccupied monetary policy for the generation before the financial crisis -- the avoidance of inflation -- is no longer the top issue,” Summers said in a Bloomberg Television interview with Stephanie Flanders on Tuesday. It’s the “maintenance of sound growth and getting to full employment.”