Ken Rogoff says that if Republicans win next week there will be more problems down the road because they will push for even more tax cuts than the Bush tax cut extension.
Speaking to Maria Bartiromo on CNBC, Rogoff also advocated stimulating more inflation in the U.S. economy to prevent a long term slog through disinflation.
“If it were me, I would take a chance, and be more aggressive about raising inflation expectations,” he said.
He also suggested that the Fed’s current strategy is more about communication then about actual action. Saying the Fed will be there to take action is more important that the actual amount of purchases the FOMC announces, according to Rogoff.
Rogoff isn’t completely negative about the U.S. economy. He thinks equity markets could bounce back in the next three to four years.
His concerns over the sovereign debt crisis in Europe have abated, somewhat, but Rogoff did expect more problems from Greece and Eastern Europe in the future.
Here’s the video:
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