Stiglitz: Greece and Spain are ‘in depression’ : Blaming it on tough austerity measures

by Machiavelli

Engineering Evil

By Agence France-Presse Wednesday, October 17, 2012 16:17 EDT

screenshot of Joseph Stiglitz

Greece and Spain are in “depression, not recession”, Nobel prize-winning economist Joseph Stiglitz said on Wednesday, blaming tough austerity measures for their downward economic spiral.

Stiglitz also maintained that the International Monetary Fund was “a little too optimistic” in its forecast last week that the eurozone economy would shrink by 0.4 percent in 2012 and rise by 0.2 percent next year.

“I’m more pessimistic than they are (about growth)… I see significant risk of continuing turmoil,” he said in New Delhi on the sidelines of a conference held by the Organisation for Economic Cooperation and Development.

“Spain and Greece are in depression, not recession. That impact was brought about by austerity” with the countries now trapped in a vicious cycle of spending cuts and slumping growth, he said.

Stiglitz, who served as…

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