Joseph Stiglitz: What's holding back the world economy?
Seven years after the global financial crisis erupted in 2008, the world economy continued to stumble in 2015. According to the United Nations’ report World Economic Situation and Prospects 2016, the average growth rate in developed economies has declined by more than 54% since the crisis. An estimated 44 million people are unemployed in developed countries, about 12 million more than in 2007, while inflation has reached its lowest level since the crisis. Neither monetary policy nor the financial sector is doing what it’s supposed to do. It appears that the flood of liquidity (from Quantitative Easing) has disproportionately gone towards creating financial wealth and inflating asset bubbles, rather than strengthening the real economy. Despite sharp declines in equity prices worldwide, market capitalisation as a share of world GDP remains high. The risk of another financial crisis cannot be ignored. (VIEW LINK)