Global economy is showing signs of resiliency
Participants have lunch on the opening day of the World Economic Forum (WEF) annual meeting on January 26, 2011 in Davos.
TEXT OF INTERVIEW
STEVE CHIOTAKIS: The World Economic Forum continues today in the ski resort of Davos, Switzerland. Among hundreds of corporate and political leaders, Harvard University Economics Professor Kenneth Rogoff is there. The former chief economist for the International Monetary Fund was part of a workshop looking at global trade and currency battles.
Kenneth Rogoff, welcome to Marketplace. Good morning.
KEN ROGOFF: Good morning.
CHIOTAKIS: Is the global economy out of the woods? Is it time to, you know, start concentrating on reducing debt rather than getting some stimulus to the economy?
ROGOFF: Well I think the recovery's reached a point where it's resilient but not robust. It happens like day follows night: you have a big financial crisis around the world, and a few years later you start seeing countries default on their debts. But it's usually been an aftershock, and not enough to shake off the recovery. But it's one of the reasons the recovery is not as robust as we're accustomed to.
CHIOTAKIS: Would you agree that this recovery is jobless, and if so, what good is a recovery at all if there aren't jobs?
ROGOFF: There are jobs, it's just slower. When you have a deep financial crisis, things are much worse for a couple years afterward, sometimes even three or four. That's what we're seeing. It could have been a lot worse; people forget that. We could have had a second Great Depression -- we didn't. But this situation with the jobs is probably going to heal only slowly, because we're growing, but we're not really growing briskly.
CHIOTAKIS: I want to talk about China sending its largest delegation there to Davos. It's obviously been criticized by this country and others for its stance on what some see as the undervaluation of the yuan. What prospects do you see for resolution of this problem? Is it ever going to come to a head?
ROGOFF: Not tomorrow, it's certainly not. I mean, the Chinese are very reluctant to do anything quickly. I think our trade issues with China are much broader than that; they include also intellectual property rights. As I understand it, the Chinese president came to the United States with promises like the government will not use counterfeit software anymore, as opposed to trying to enforce property rights around the whole private sector. So it's really a gradual thing. And everyone agrees they should do it -- the leaders don't want to do it -- it's happening very, very slowly.
CHIOTAKIS: Kenneth Rogoff, economist at Harvard University. Thank you, sir.
ROGOFF: Thank you.