Former Treasury Secretary Larry Summers said on Sunday that a recession in the United States was not guaranteed, even though the historical context indicates that the country could experience one next year.
“Nothing is inevitable or certain in economics, Chuck,” Summers told host Chuck Todd on NBC’s “Meet the Press.”
“The painful fact, though, is that historically when we’ve had inflation above 4% and we’ve had unemployment below 4%, virtually always, since World War II, that’s been followed by a recession in the next two years,” says Summers.
The Harvard University professor said the US might be able to avoid a recession if the Federal Reserve was “extraordinarily shrewd and lucky”, although he said the agency had a “job very, very difficult.”
“Maybe we will get lucky and there will be fast enough adjustments in commodity prices and other bottlenecks that will [recession] not happen,” Summers said.
Summers also said the United States should consider options including releasing strategic oil reserves and tariff reductions.
The economist has frequently criticized the Biden administration’s economic actions and warned they would drive up inflation. Early last year, Summers criticized the administration’s stimulus packages as irresponsible.
Summers told Todd on Sunday that the United States may have been “too slow” to notice the pace at which the economy was recovering.
“I think we were too slow to understand how quickly the economy was recovering and so we injected more demand into the economy both in terms of deficits and in terms of monetary policy than it seems today. today have been the right amount,” he said. .
“But I was concerned last year that we were injecting too much demand into the economy given all the configurations and I don’t think it’s a good strategy to create labor shortages as big as the shortages of workforce that we have created.”