Tuesday, October 15, 2002
War against Iraq will hurt global economy: Stiglitz
Agency France-Presse Seoul, October 15
Nobel Prize winner for economics for 2001, Joseph Stiglitz on Tuesday warned that a US war against Iraq would have a "very negative" impact on the global economy.
Stiglitz also accused President George Bush of "mismanagement" of the US economy and forcing a global downturn on the rest of the world.
Speaking at the World Knowledge Forum, Stiglitz said many people hoping for an economic boom from a war on Iraq would be disappointed.
They confuse what happened in World War II with what could happen today, he said.
World War II helped the world out of global deflation and had a positive impact on the world economy, he said.
"This current war, if it occurs, is likely to have a high probability of having a very negative impact," he told journalists.
He said the differences between World War II and a possible war against Iraq was that World War II was a war of total mobilisation with huge expenditures.
But a war on Iraq was likely to involve fewer people and less expenditure in terms of the global economic growth.
"The benefit in terms of the economics of that stimulus (from a US-Iraq war) is likely to be more than offset by the adverse effect that uncertainty is having on investment, consumption and the possible adverse effects on oil prices," he said.
"This is a very different kind of situation from World War II. Therefore, (there are) much more downside effects in terms of the global economy," Stiglitz said.
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