The American star economist gave an exclusive talk at Europe’s largest trade fair for property and investment in Munich
This year, EXPO REAL was honored to welcome a very special guest: renowned American economist Nouriel Roubini. On the final day of the trade fair, the economist once maligned as “Dr. Doom,” spoke in front of invited guests about the current economic climate and prospects in the wake of Brexit and in the run-up to the US Presidential Election in November. The core of his message was that the situation is not currently dangerous, but that this could change rapidly.
“Europe is in a bad neighborhood”
Roubini is renowned among experts as being one of only a handful of economists to have predicted the financial crisis of 2006. At that time, sceptics who dismissed the New York professor’s opinion unfairly dubbed him “Dr. Doom.” Roubini hastened to add that his assessment of the current situation does not mean that everything is fine with the global economy: “Growth has been too weak for too long, currently benefiting too few people.” And Europe is in an uncomfortable position geographically, too: “Europe is in a bad neighborhood. Russia is becoming more aggressive, while the Middle East burns.”
He remained level-headed on Brexit and the resulting uncertainties — the topic on everyone’s lips at EXPO REAL. Roubini said: “Brexit has been, from the financial market point of view, a non-event: It was a shock, not a crisis, it was a regional shock, not a global shock, and it has been a temporary shock: It lasted about a week.” Yet Roubini did also admit that “Europe needs to stick together, because either you swim together or you are going to sink together”
Possible Trump victory a “short-term risk”
He considers the prospect of Donald Trump winning the American Presidential Election and the associated fall-out a “short-term risk.” Roubini said: “If he is elected, the question will be whether he will act moderately or if his politics will be as radical as he has proclaimed in some of his speeches.” It does look, however, less likely that Trump will be successful in his bid, to which Roubini noted: “This may be why the markets are currently downplaying this unique risk.”