Joseph Stiglitz, Nobel laureate in Economics and University Professor at Columbia University, diagnosed that the U.S. economy will face stagflation with the second term of the Trump administration. He expressed concerns that global cooperation on issues requiring joint efforts, such as climate change and population crises, will regress.
On the 21st, Professor Stiglitz made these remarks during a special lecture and dialogue at the international finance conference titled "Beyond the Global Great Transformation and Policy Pivot: Sustainable Growth and the Future of Finance," co-hosted by the World Economy Research Institute and KB Financial Group at the Conrad Hotel in Yeouido, Seoul.
He said, "As the United States has held a historic election, every country around the world faces tremendous challenges," adding, "Although uncertainty about Trump's second term is high, it is certain that there will be large-scale tax cuts, massive fiscal deficits, and tax cuts for billionaires and corporations. This will cause inflation, which had stabilized faster than expected, to rise again, ultimately leading the U.S. economy to face stagflation."
He continued, "We will witness the end of global cooperation and collaboration, which are essential for addressing issues requiring worldwide cooperation, such as climate change and population crises," and added, "The regression of cooperation, especially in the climate sector, is the most heartbreaking and concerning point."
Meanwhile, the conference discussed Korea's challenges and response directions amid the rapidly changing global economy and geopolitical landscape following the U.S. presidential election, and explored the role and strategies of finance to support overcoming climate change and population crises.
Nicholas Lardy, Senior Fellow at the Peterson Institute for International Economics (PIIE), who gave the keynote speech for Session 1, addressed concerns that the U.S.-China trade conflict might intensify further with Trump's election and that the Chinese economy could face greater difficulties. He analyzed, "The pessimistic outlook on the Chinese economy is somewhat exaggerated, and the reality includes positive factors and significant recovery potential."
He added, "Recently, claims have emerged that China is falling into deflation and stagnation similar to Japan, but this is a misunderstanding that does not accurately reflect the reality of the Chinese economy," diagnosing, "China's corporate investment and economic activities are still alive, and unlike Japan, it has higher growth potential."
Vinod Thomas, former Senior Vice President of the World Bank (WB), who participated as the keynote speaker for Session 2, spoke on the climate crisis, stating, "The world, having suffered losses from environmental destruction for decades, faces an urgent task to achieve net negative carbon emissions before 2050," and urged, "Strong regulations for the transition from fossil fuels to renewable energy, along with financial and policy support from central banks, are necessary."
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