Edmund Phelps Says it Could Take 15 Years for Households to Recover Their Lost Wealth

By on June 24, 2009

Columbia University professor Edmund Phelps, won the Nobel Prize in economics in 2006, and now claims that it could take quite a long time for U. S. households to rebuild their balance sheets. Phelps added that there is no “silver bullet” that will make this process proceed more quickly. Phelps also predicts that unemployment will stabilize at 7 percent over the next three to five years.

SMA Comment: There is a widespread belief that government stimulus and Fed easing can renew prosperity. This is rubbish. The only thing that will dig us out of this hole quickly (2-3 years) is a wave of innovation and productivity growth heretofore unseen.

Source:

http://www.bloomberg.com/apps/news?pid=20601103&sid=aKMxwUC4D3nw
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