Nobel laureate Joseph Stiglitz said the Federal Reserve’s purchases of $600 billion in Treasury securities are unlikely to boost the U.S. economy and called for additional government spending instead.
“I am very pessimistic that quantitative easing will have any significant effect,” Stiglitz, a professor of economics at Columbia University in New York, said today in an interview on CNBC. “I think the stimulus package we had worked. It did stimulate the economy. If it weren’t for that, the unemployment rate would have been even higher.”
Stiglitz also said the Fed’s asset-purchase program, sometimes known as “quantitative easing,” may lead to “speculative bubbles” and weaken the dollar. He called it the 21st-century equivalent of “beggar thy neighbor” competitive devaluations that took place during the Great Depression.