Paul Krugman: End of World 'Postponed'

(AP)
Princeton economist and New York Times columnist Paul Krugman (pictured left in a file photo) is feeling optimistic — at least in terms of a global financial apocalypse being averted.

Bloomberg's Kati Pohjanpalo reports that, speaking at a seminar in Helsinki today, the Nobel Prize-winner said that "the end of the world appears to have been postponed."

Krugman indicated that the recession in the United States may have ended this summer, and that globally the economic downturn has bottomed out.

He said the world economy "does not appear to be falling into an abyss" but is still in trouble, and warned that recovery will be "slow and painful."

How slow? How painful? Krugman predicted that U.S. unemployment may continue to rise until early 2011.

Crediting budget deficits with avoiding even an even worse crisis (they "saved the world" in the short term, he said), Krugman cast doubt on exports driving a global recovery.

Krugman admitted history is not a great guide.

"The trouble is, we really have no road maps," he said. "The only model is the Great Depression itself" — which he said was ended by a very large spending program also known as World War II.

"We don't really want to repeat that," he said.

For more read Pohjanpalo's article at Bloomberg.com.

  • David Morgan

    David Morgan is a senior editor at CBSNews.com and cbssundaymorning.com.