Harvard economics professor Kenneth Rogoff, who previously served as chief economist at the International Monetary Fund (IMF), has warned that a US default on its debt obligations could spark a financial crisis. global mainstream.
Harvard economics professor Kenneth Rogoff shared his views on the US economy, the possibility of US default, and the global financial crisis in an interview with ET editor Srijana Mitra Das.
Rogoff is Professor of Economics, and from 2001–2003 he was Chief Economist and Director of Research at the International Monetary Fund (IMF).
He was asked if the current US debt crisis and potential default could “bring the risks of a global recession” . Rugoff replied:
Absolute. The risks still exist anyway, but if this gets worse, it could trigger a global financial crisis. I hope that doesn’t happen – but it’s a very dangerous situation and we’re in unknown waters.
US Treasury Secretary Janet Yellen has said that the Treasury Department may not be able to pay all government bills as early as June 1 ” if Congress does not increase or suspend the debt limit by the deadline.” that point.”
However, some believe that raising the debt ceiling will make matters worse, including economist Peter Schiff.
Like Yellen, the Congressional Budget Office similarly warned that the government could default on its debt in the first two weeks of June .
The IMF warned last week that a US default would have “ very serious consequences “. Meanwhile, former President and 2024 presidential candidate Donald Trump has urged Republican lawmakers to let the US default if Democrats don’t agree to cut spending.