Reference News Network, March 18 report: According to AFP, on March 16, Nobel laureate in economics Joseph Stiglitz told AFP that the intense fighting in the Middle East has put the United States at a "quite high" risk of stagflation.
Stiglitz believes that even before the conflict broke out on February 28, the U.S. economy was already "close to stagflation," a situation characterized by high inflation and low economic growth.
He explained to AFP in Geneva that several indicators had already predicted low growth in the U.S. before the war, but the conflict "has brought us into a crisis."
After Iran blocked the Strait of Hormuz shipping lane and attacked energy and maritime targets in retaliation for attacks by the U.S. and Israel, global oil prices surged by 40% to 50%.
This situation has raised concerns about the global trade system, which has been damaged by U.S. President Trump's tariff policies and the fragmentation of supply chains since the COVID-19 pandemic and the subsequent Ukraine war.
Stiglitz said that the U.S. remains the country with the highest risk of stagflation, just like during the oil crisis of the 1970s.
He said, "The risk of stagflation seems quite high for the United States."
Stiglitz listed a series of worrying situations, such as a stagnation in the labor market in 2025 and an increase in the unemployment rate last month.
He added that although there are economic data showing positive growth, the growth is "unbalanced," with about one-third coming from the construction of artificial intelligence dedicated data centers.
He believes that the situation elsewhere is not as severe.
He explained that although Europe will definitely face inflationary pressures from the energy sector, its economic growth has been boosted by a significant increase in defense spending.
At the same time, he pointed out that Trump's protectionist policies will exacerbate inflation in the U.S.
This economist believes that this is because "Trump destroyed confidence in the U.S. and the dollar from the outside." "A weaker dollar means that everything we import is more expensive in dollar terms."
Now, in addition to the above factors, there is also inflation related to the war, as well as increasing uncertainty within households and businesses.
Stiglitz pointed out that American households and businesses "don't know what the tariffs will be or how long the war will last. They don't know how energy prices will change." In such a situation, companies "can't make investments." (Translated by Lin Xiaoxuan)
Original: toutiao.com/article/7618564330287677978/
Statement: This article represents the views of the author himself.