Economist Who Predicted 2008 Financial Crisis Says COVID-19 Financial Crisis Will Be More Severe But Shorter
A coronavirus driven financial crisis will be more severe than the 2008 financial crisis but it would not last as long, according to an economist who predicted the last financial crisis.
Economist Nouriel Roubini, the author of “Crisis Economics: A Crash Course in the Future of Finance” and an academician at the Stern School of New York University, believes that the coronavirus pandemic will send the global economy into another great depression.
Roubini is also known as “Dr. Doom” for his accurate predictions about the 2008 global financial crisis.
“This is going to be more severe than the global financial crisis because it’s front-loaded— it didn’t take a year and a half for the collapse of output,” Roubini told Yahoo Finance in an interview.
“It could be shorter, three quarters, rather than 6-7, but it’s going to be very severe.”
The coronavirus outbreak has already sparked a global recession, according to bankers including Goldman Sachs.
A revised outlook from the University of California, Los Angeles (UCLA) Anderson Forecast also says that the 2020 recession will be more severe but shorter than the 2008 financial crisis with a conservative estimate of 6.5 percent GDP loss in the second quarter and a 7.8 percent loss of real consumption.
“This is unprecedented. This is a public health crisis morphing into a giant economic crisis,” David Shulman, senior economist at UCLA Anderson Forecast, tells GlobeSt.com.
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“We are going to see massive layoffs, a record drop in quarterly GDP in the second quarter. The solution is more of a medical question than an economic question. You have to look at this as a public crisis that is giving a big shock to the economy.”