Nomura Chief Economist, Richard Koo, has it right!
Governments must maintain fiscal stimulus measures to prevent their economies from sliding back into recession, according to Richard Koo, chief economist at
Nomura Research Institute Ltd. in Tokyo.
“Political momentum all around the world now is to try and reduce budget deficits,” Koo said in a speech in Johannesburg today at a function hosted by Nedbank Group Ltd. “If you try to reduce budget deficits, we’ll enter the double dip.”
“This is no time to cut budget deficits,” said Koo. “This is a different disease -- this is not a normal recession by any stretch of the imagination.”
“The market is saying if you have highways or schools to build, do it now.”