We Are in Age of ‘Late Great Depression’: Shiller
Published: Monday, 30 Apr 2012 | 6:44 AM ET
By: Catherine Boyle
Staff Writer, CNBC.com
The world is in a state of “late Great Depression,” well-known economist and author Robert Shiller told CNBC Monday.
The Yale economics professor, who helped devise the Case-Shiller index for housing market trends, and famously called the dotcom bubble of the early 2000s and the housing market bubble later in the decade, told “Squawk Box Europe” that the world is in a “new age of austerity.”
“Our whole economy has been affected by variations in confidence. Central banks are sort of trusted, but the actions they have often affect people’s confidence by appearance rather than substance. We’re not in the most trusting mood now,” Shiller said.
Many economists believe that the embattled euro zone has already entered the second part of a double-dip recession, with official figures due out this week expected to confirm as much.
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“Quantitative easing is not as prominent a policy as austerity ... the effect of austerity is not crystal clear because it depends how people react to it,” Shiller said. “It might help, but I don’t know if it’s going to overwhelm the general mood of austerity which is affecting the housing market.”
Shiller said that the U.S. housing market was “really hard to forecast” at the moment, but added: “The general presumption is that home prices are going down and that’s good — it’ll make them more affordable.”
Full story: http://www.cnbc.com/id/47200513
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