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Barry Icahngreen, professor of economics at UC Berkeley, who is considered a scholar in international economic and financial policy, said: “The US government released another $ 900 billion in stimulus funds to respond to the new coronavirus infection. (Corona 19), but the economy recovered as expected. It will be difficult to do. ”Americans with cash are expected to increase their savings rather than spend to prepare for a major recession.
In an email interview with the Korea Economic Daily, Professor IcahnGreen said: “The expectation that China’s economic development will lead to more openness and democracy is gradually diminishing.” “Joe Biden’s next administration is a difficult task to solve.”
I did not hesitate to say something bitter about the Donald Trump administration, which has two weeks left in office. “Foreign policy was full of errors,” he criticized. “Branding Switzerland and Vietnam as currency manipulators is of no use to the American economy.” He advised: “As inequality in countries like the United States and Korea is intensifying after the Corona 19 incident, there is a need to significantly expand investment in vocational education and training.”
▷ The Covid-19 vaccine is being supplied on a large scale in the US and additional stimulus funds are being released. Expectations for an economic recovery are rising.
“Most people seem to think that the US economy will be revitalized after the vaccine is released. I have a different opinion. Less optimistic. Although the vaccine has only just begun, mass immunity will have to go through a long and difficult process. It could take up to a year to finish vaccination in the United States. “
▷ Why can’t I speed up more?
“The main cause is that the United States public health system is not uniform. It is quite dispersed, so the level varies from region to region. Countries with highly decentralized health systems like the United States are the same. Fortunately, the survey found that skepticism about the effectiveness and safety of vaccines is waning. President Donald Trump was not very helpful in the process of dealing with the Corona 19 outbreak. If more than 70 million voters (in support of Trump) collectively reject vaccination, the United States will never achieve mass immunity. As the perception of vaccines is changing, I think we will eventually get over it, even if it takes time. “
▷ How useful is a stimulus package that provides direct cash to Americans?
“I think there will be a clear limit. This is because, even if you receive cash, it is not easy to regain your strong spending habits as in the past. A typical example is that you and I began to “pre-emptively save” when the economic shock struck immediately after the pandemic (a global pandemic of the pandemic). Again, the stacking phenomenon can be reproduced without spending money. “
▷ In Europe, where the number of confirmed corona 19 cases is increasing rapidly, the economic lockdown is expanding.
“To forecast the European market, you have to look at it in detail. Because the situation is different for each country. The German economy, for example, is highly dependent on exports to China. The situation in Germany is good among European countries, as the Chinese economy is in a clear recovery. The problem is Italy. It is one of the oldest societies, which makes it vulnerable to COVID-19. There is also a lot of debt, so the recovery can be relatively slow. “
▷ You are very optimistic about the Chinese economy.
“Europe is similar, but China has a centralized public health system. Vaccines can be released and distributed much more efficiently than in the United States. Also, unlike the United States and Europe, China first restarted its economy without huge fiscal and monetary policies. “
▷ There is an expectation that the US government will apply a tough policy to China.
“The trade conflict between the United States and China is inevitable. Intellectual property rights, security and human rights can lead to more serious conflicts than trade. Instead, the focus will shift once the Biden administration is in place. Rather than dealing only with China like Trump, we will work with like-minded countries to respond. Put pressure on China by forming a kind of united front. “
▷ Can China eventually change that way?
“It is difficult to be sure. However, a different approach than the Trump administration is essential. We already know that China’s economic development does not lead to a more open and democratic political system. It is a very difficult task in America. We need to be more skeptical about China and plan a strategy. Also, I don’t think there is a country that benefits from the conflict between the two sides. You shouldn’t expect reflection benefits. “
▷ How do you forecast the rest of emerging markets except China?
“As in Europe, it is impossible to unite emerging markets in a single framework. You have to look at each country in detail. First of all, it can be said that the prospects for China and neighboring countries are bright. By contrast, emerging economies on other continents, such as Turkey, Brazil and South Africa, are more likely to face a much more serious financial crisis. “
▷ There are many points where the global economy is showing a K-polarization. What is the solution?
“In both Korea and the United States, inequality, like that of the rich and the poor, has always been a big problem. This inequality has intensified after the coronavirus outbreak. Statistics show that, for example, in the wealthy country of the United States, there are quite a few school ages who are not getting enough nutrients. Short-term improvement measures are tax increases and income redistribution. It is introducing public assistance programs that pay more taxes to the rich and more to the low-income. But, literally, it’s just a short-term recipe. A sustainable solution is to prepare low-income families for the ‘post-corona’. It’s a way to give you the skills you need so that you can be productive yourself. That is education and training. A much better alternative is to expand higher education opportunities, such as universities, and strengthen vocational training systems. Just keep in mind that it takes time to create a program like this. “
▷ President Trump’s term is almost over. Please rate your foreign policy.
“It’s so frustrating that it’s hard to find something good. Foreign policy was unbalanced and there were many mistakes. Simply by normalizing Morocco-Israel relations, which are the fruit of achievements. For the bilateral agreement, the United States recognized the controversial sovereignty of Western Sahara from Morocco (Morocco annexed Western Sahara in 1979 without international consent). This not only created a new risk of conflict in the region, but as a result it was not helpful for Israeli security. Another example is Switzerland and Vietnam designated as currency manipulators. It only hurts international cooperation and weakens the American economy. It put a heavy burden on the Biden government. “
▷ What policies should be applied intensively after the Biden government assumes power?
Shortly after taking office, Biden vowed to return to the Paris Climate Agreement. I will also join the World Trade Organization (WTO) and work on organizational reform. You are recreating a rules-based trading system. The Trump administration will not immediately renounce high retaliatory tariffs imposed on China. I believe that through more systematic and effective negotiations, access to the Chinese market will be expanded and the takeover of intellectual property rights will be prevented. Of course, in exchange for reducing some of the retaliatory fees. “
▷ The top 20 countries (G20) took the Deferred Debt Amortization Measure (DSI) targeting 73 low-income countries that were hit hard by Corona 19. I recently wrote that there are many limits here.
“While rich countries have delayed repaying interest to developing countries, they have not discovered a way to attract private financial institutions. Private debt remains the same. Money owed to each government can first be returned to private companies. Furthermore, we negotiate only with the poorest countries, excluding ‘medium’ debtors such as Brazil, Turkey and South Africa ”.
■ Professor Icahngreen …
Selected as one of the 100 most influential intellectuals in the world
Barry Icahngreen, a professor of economics at the University of California, Berkeley (UC Berkeley), is considered an expert on world-class monetary and financial systems. He began teaching at UC Berkeley in 1987. Ben Bernanke is known to have had a major impact on the monetary policy of the former president of the United States Central Bank (Fed).
After receiving his master’s and doctorate degrees in economics from Yale University, he served as president of the Peterson Institute for International Economics, a researcher at the American Economic Research Institute (NBER), and a senior policy advisor at the International Monetary Fund (IMF). Forinpolicy, a bi-monthly diplomatic magazine, was selected as the ‘100 most influential intellectuals in the world’ in 2011.
He is also a prominent Jihan-pa economist. He is still a full-time professor at the UC Berkeley Institute for Korean Studies. He is a co-author of The Korean Economy: From Miracle History to Sustainable Future.
△ Bachelor of Economics at UC Santa Cruz △ Master and Ph.D. in Economics at Yale University △ Professor at UC Berkeley △ Sumpeter Award, International Soumpeter Society (2010) △ President
New York = Correspondent Jae-gil Cho [email protected]
