Monday, March 08, 2010

ECB's Jürgen Stark: Lost Decade Possible

by Bill McBride on 3/08/2010 01:15:00 PM

Jürgen Stark, Member of the Executive Board, European Central Bank, spoke at the NABE Economic Policy Conference that is being held in Arlington, Va. Stark's talk was titled: "Is the Global Economy Headed for a Lost Decade? A European Perspective".

From MarketWatch: 'Lost decade' possible for global economy, ECB's Stark says

"The failure to address long-overdue reform challenges promptly might result in a 'lost decade' for the global economy," Stark warned Monday ... "Only partial progress has been made so far, and the distortions that led to global imbalances are still present."
...
Despite some stability, "substantial fragilities remain and the outlook is fraught with risks," Stark said.
Stark apparently discussed the need for reform of financial oversight, flexible exchange rates (China), and more balanced trade.

Stark is also concerned about global stagflation.

And more from Reuters: ECB's Stark rebuffs European rescue fund idea

My view is another lost decade in the U.S. is unlikely, and I'm more concerned with deflationary pressures in the short term (next year or so) than stagflation.

Note: As I mentioned in the weekly schedule, Brian Sack, Executive Vice President, Federal Reserve Bank of New York will speak tonight (5 PM ET) on the Fed's Balance Sheet Policies. That is of more immediate interest!