The new coronavirus pandemic is turning into a severe economic crisis, said World Bank (WB) Chief Economist Carmen Reinhart. She also warned of the possibility of a financial crisis.
Reinhart, who became the SB’s chief economist in June, is best known for her book on the latest financial crisis, This Time Is Different: Eight Centuries of Financial Folly, which she wrote with Harvard colleague Kenneth Rogoff at the time. .
Asked if buying central bank bonds to keep yields low was a zero-sum game, as everyone does, Reinhart said:
“This is a war. Governments finance war spending as much as they can during wars, and they have huge needs right now. ”She added that this scenario is unsustainable.