Stiglitz on US stimulus policy

The Nobel prize winner economist Joseph Stiglitz confirmed Bernankes testimony that cutting the stimulus package would be a step taken too early for the economy considering its recent stability. Bloomberg cited Stiglitz saying “Its the only stimulus” he stated on 25th of May, “Clearly the economy is not back to normal, and to accept this as the new normal would be really wrong”.

Most of US stocks dropped lightly, as the Dow Jones Industrial average followed, S&P 500 also dipped after the statement of Fed Chairman Bernanke. He declared that stimulus program could be lessened if economy shows indications of sustained growth. The economy is in a recovery phase according to specialists and the main issue right now is sustaining it and using that momentum.

The President of Federal Reserve Bank of New York – William C. Dudley said the condition of economy is to be known after three-four months. Its truly a difficult job to read between weak indicators of economy growth.