The chaos that followed the Lehman bankruptcy will come to an end in the next few months, Larry Summers says. The dynamic of inventories being rebuilt and stimulus measures will ultimately lead to expansion in the not to distant future but the sustainability of any bounce will need help from a rebound in the global economy.
Prospects for a quick rebound in unemployment are not very strong given the lagging nature of employment.
He admits the 1990s prosperity, oftens seen as “a golden age” of Rubinomics, was in fact the result of a bubble in tech stocks much like the prosperity of this decade was built on a credit bubble.
