Professor Stiglitz Warns of Stagflation Risk in US Economy... Structural Reforms Needed

Joseph Stiglitz, a professor at Columbia University, recently warned that the U.S. economy is facing a serious risk of stagflation (high inflation combined with economic recession). He argues that this is a result of the ongoing chaos in the global economy caused by the aftermath of the war between the United States and Iran.

In an interview on the economic podcast “Money Matters,” Professor Stiglitz analyzed that the U.S. economy has been under continuous pressure from rising prices due to tariffs, and the impact of the war has made high inflation even more severe. Under these circumstances, economic growth is slowing down, and he believes the U.S. will face a difficult economic environment.

He particularly emphasized that rising international oil prices pose a deadly threat to the U.S. economy. Although the U.S. is a net oil exporter, rising oil prices will clearly have a negative impact on the economy. He cited the 1974 Middle East oil crisis, which caused a severe recession worldwide, to illustrate this point, noting that global economic recovery took a long time after that.

Additionally, he criticized the current over-reliance on artificial intelligence in the U.S. economic structure as unhealthy. While the AI industry itself is experiencing rapid growth, he warned that excessive investment could eventually lead to a bubble burst. If a market bubble bursts under these conditions, it could cause serious shocks to the entire economy.

Therefore, Professor Stiglitz emphasized that to escape such crises in the future, the U.S. needs structural reforms, closely monitor the global economic situation, and adopt proactive policies. This warning seems likely to be an important factor in determining the future direction of economic policy.