Lates News

Swiss "Neue Zrcher Zeitung" website published an interview with Carmen Reinhart, a Harvard University professor and former chief economist of the World Bank, by reporter Albert Schtek on June 17th, as follows: Albert Schtek asked: "Ms. Reinhart, you specialize in studying global financial crises. The world is currently experiencing immense turmoil and appears very chaotic. Can you see any patterns behind this?" Carmen Reinhart answered: "For me, the core issue is the increasing uncertainty. Many things become unstable suddenly in times of turmoil. In such a world, people no longer know what to follow. A similar situation occurred in the 1970s. High inflation at that time led to severe loss of confidence. But one thing was different back then: debt was only a small part of today. The factor that makes debt so dangerous today is the 'great ease' that the world has benefited from in the past few decades. Not only has economic volatility decreased, but more importantly, interest rates have also decreased significantly. This has led to our borrowing costs becoming lower and lower." (Reference: People's Daily)