国际英语新闻：World economic crisis needs two years to fully recover

KUALA LUMPUR, Aug. 10 (Xinhua) -- The prevailing global financial crisis needed two years to recover genuinely, an expert said here on Monday.

    Paul Krugman, economy professor from Prince University in the United States, said that even if the gross domestic product (GDP) was growing, employment might still remain low.

    When addressing the participants at the World Capital Markets Symposium here, Krugman said in November 2001, the U.S. began to recover from the technology bubble crisis with growth seen in GDP and production, but the employment rate saw no improvement until third quarter of 2003.

    The two-day symposium's theme is "The Global Financial Crisis: The Way Ahead" and has drawn over 500 participants from more than 30 countries and regions. It aims at deliberating on issues arising from the financial crisis and finding solutions to them.

    Krugman said the efforts dedicated by governments of all countries had prevented the world from plunging into a great depression but they are still far away from full recovery.

    The U.S. once underwent a V-shape recovery in the recessions taking place before the 90's but there was no sign of the said discovery at this moment, added Krugman.

    When asked about the short-term measures to shun away from the crisis, Krugman stressed the importance of adopting an expanding fiscal policy.

    Taking the U.S. as an example, Krugman said that an additional 500 billion U.S. dollars of government spending might result in the nation's debt rising to 60 percent of its GDP but that could possibly translate into a 2.5 percent GDP growth.

    He said that as long as a nation's debt did not go up to 100 percent of its GDP, there were still room for the government to raise debt and there should be no worries.

    Sometimes budget deficit could be necessary and it could be a country's best friend, especially during bad times, added Krugman.

    This was because when the people tend to slash expenses due to a drop in income, government's spending had become crucial to support the economy, explained Krugman.

    Fiscal policies and monetary policies are two policies that can be manipulated accordingly to stimulate economic growth.

    However, Krugman said monetary policies had its limit as excessive decrease in interest rates would not help stimulate the economy.

    KUALA LUMPUR, Aug. 10 (Xinhua) -- The prevailing global financial crisis needed two years to recover genuinely, an expert said here on Monday.

    Paul Krugman, economy professor from Prince University in the United States, said that even if the gross domestic product (GDP) was growing, employment might still remain low.

    When addressing the participants at the World Capital Markets Symposium here, Krugman said in November 2001, the U.S. began to recover from the technology bubble crisis with growth seen in GDP and production, but the employment rate saw no improvement until third quarter of 2003.

    The two-day symposium's theme is "The Global Financial Crisis: The Way Ahead" and has drawn over 500 participants from more than 30 countries and regions. It aims at deliberating on issues arising from the financial crisis and finding solutions to them.

    Krugman said the efforts dedicated by governments of all countries had prevented the world from plunging into a great depression but they are still far away from full recovery.

    The U.S. once underwent a V-shape recovery in the recessions taking place before the 90's but there was no sign of the said discovery at this moment, added Krugman.

    When asked about the short-term measures to shun away from the crisis, Krugman stressed the importance of adopting an expanding fiscal policy.

    Taking the U.S. as an example, Krugman said that an additional 500 billion U.S. dollars of government spending might result in the nation's debt rising to 60 percent of its GDP but that could possibly translate into a 2.5 percent GDP growth.

    He said that as long as a nation's debt did not go up to 100 percent of its GDP, there were still room for the government to raise debt and there should be no worries.

    Sometimes budget deficit could be necessary and it could be a country's best friend, especially during bad times, added Krugman.

    This was because when the people tend to slash expenses due to a drop in income, government's spending had become crucial to support the economy, explained Krugman.

    Fiscal policies and monetary policies are two policies that can be manipulated accordingly to stimulate economic growth.

    However, Krugman said monetary policies had its limit as excessive decrease in interest rates would not help stimulate the economy.