Global economy picking up but exit talk 'premature': Stiglitz

BUSAN, Oct. 28 (Yonhap) -- The global economy is rebounding from the steep downturn prompted by the financial rout last year but it is still nowhere near a robust recovery, a Nobel prize-winning economist said Wednesday, emphasizing it is "premature" to talk about when to begin withdrawing measures introduced to stimulate the economy.

"My view is that obviously we are much better-off than we were a year ago at the
state of free fall after the crash of Lehman brothers. But we are nowhere near a
robust global recovery," Joseph Stiglitz told reporters on the sidelines of an
international forum currently underway in this southeastern port city.
"Different countries are at different stages in the recovery but certainly I
think it is premature for the U.S. and Europe to engage in exit strategies. The
real worry right now in the U.S. is that there are serious bumps on the road," he
noted, citing an increasing jobless rate and credit card problems in the world's
largest economy.
Stiglitz won the 2001 Nobel Prize in economics for his study that challenged the
classical economic theory that the market is efficient because of symmetrical
information-sharing.
He is visiting South Korea for the four-day forum jointly held by Seoul's
statistical office and the Organization for Economic Cooperation and Development.
Participants at the forum, which kicked off Monday, were discussing ways to
produce better methods of measuring economic growth and development.
His views on global growth and the timing for the so-called exit strategy are
shared by policymakers from the Group of 20 emerging and developed economies,
which earlier agreed to make a coordinated move in rolling back the stimulus
measures they put in place to ease the economic downturn.
Debate has also been brewing here over when and how to start rolling back
stimulus measures after the Seoul government and the central bank expanded fiscal
spending, reduced taxes and slashed its key rate over the past year. Those
measures helped the nation's economy enjoy a better-than-expected recovery, with
domestic demand and exports steadily bouncing back.
Stiglitz said that Asia's relatively fast growth is due to such stimulus measures
introduced by individual governments and rising demand from China, but stressed
that is not enough to pull the whole world out of the downturn given the region's
small economic size.
"All of that (Asian) region has benefited from strong growth in China and their
very strong stimulus. Some of the other Asian courtiers have put in place very
good economic polices," he said.
"The result is that their economies like Korea have done among the best of the
OECD. There has been kind of decoupling that Asia has been able to recover faster
than Europe and U.S but Asia is still too small from an economic point of view
(to lead the world's economy out of a downturn," he added.
Touching on the weakening value of the dollar, Stiglitz, a professor at Columbia
University in New York, said that the trend will likely continue for the time
being considering the size of the U.S. trade deficit and global trade imbalances.
Commenting on the hosting of the G20 summit by South Korea in next November, he
said that the meeting is an important change and a "step forward" at a time when
many issues facing the world cannot be addressed by just a few advanced nations.
"The G20 is important reflection of changing global system. Movement from the G8
to the G20 is very important step forward. You could not deal with global
environment with just eight countries," he said. "Hosting (the G20 summit) here
is a statement about the changing global economic landscape," he said.
kokobj@yna.co.kr
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