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Larry Summers on his top risks


Economist Larry Summers would estimate a better than 50-50 chance that the world will be rocked by another event on the scale of Covid within the next 15 years.

The Harvard professor and former U.S. Treasury secretary shared what he sees as the world’s biggest in the near term during a CNBC-led panel on the final day of the World Economic Forum in Davos, Switzerland.

These included the possibility of the re-mutation of the Covid-19 virus, which he noted no other panelist had mentioned when discussing the global economic outlook.

Summers attended the session along with IMF Managing Director Kristalina Georgieva, ECB President Christine Lagarde, French Finance Minister Bruno Le Maire and Bank of Japan Governor Haruhiko Kuroda.

Summers said his main concern was a spike in inflation due to a loss of confidence in the central bank; high debt in many regions and the potential need for “financial firefighting domestically and globally” if interest rates rise more than expected; hyper-populism affecting elections; and geopolitical risks in Asia and the Middle East that create a “potentially destabilizing wildcard.”

“I would like to point out that the odds of a problem on the scale of Covid occurring in the next 15 years are, in my view, better than 50-50, and that the world is completely unprepared for that possibility,” said he

Meanwhile, Georgieva from the IMF general its own economic concerns, including the rise of China, which is driving up energy prices, the war in Ukraine, which is damaging lives as well as confidence, and rising unemployment, coinciding with a cost-of-living crisis.

Pandemic concerns are low on the WEF agenda this year, instead dominated by cautious optimism about the outlook for global growth, China’s recovery, interest rates, the cost of living, trade disputes, climate change and the war in Ukraine.

Where it has been discussed, it has usually been about the risks to the Chinese population as they experience a a surge in infections.

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