US Economy

Larry Summers on Trade, Tariffs, and the Economy

October 2, 2018  • Aspen Ideas to Go

The economic recovery that America is experiencing is unusually long. We’re in the ninth year of improved business activity following the Great Recession. The recovery’s length is “very, very unusual in historical terms,” says Gillian Tett, US managing editor of the Financial Times. On June 29th at the Aspen Ideas Festival, she asked former US Treasury Secretary Larry Summers if the country was due for a recession. He thinks the right judgement for the American economy is “the odds are about 20 percent a year, perhaps 25 percent a year, that the economy will go into recession if it’s not currently in recession.” If the recovery continues for three more years, he says he’d be a bit surprised. If it runs for five more years he says, “I’d be very surprised.” He sees signs of excess already emerging—in asset prices and the erosion of credit standards. “Loans are starting to be available for the asking in the way they were in 2006 and 2007.”

In the podcast episode Summers also talks with Tett about his disagreements with the current direction of US economic policy, the trade war, and his assessment of the performance of Federal Reserve Chair Jerome Powell.

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