The Coming Greater Depression of the 2020s
— April 28, 2020
By Nouriel Roubini
The first trend concerns deficits and their corollary risks: debts and defaults. The policy response to the COVID-19 crisis entails a massive increase in fiscal deficits – on the order of 10% of GDP or more – at a time when public debt levels in many countries were already high, if not unsustainable.
Worse, the loss of income for many households and firms means that private-sector debt levels will become unsustainable, too, potentially leading to mass defaults and bankruptcies. Together with soaring levels of public debt, this all but ensures a more anemic recovery than the one that followed the Great Recession a decade ago.
Read the full Project Syndicate article.
Nouriel Roubini is a Professor of Economics and International Business and the Robert Stansky Research Faculty Fellow.