Rostov Lecture on International Affairs
Dr. Lawrence Summers, Charles W. Eliot University Professor and President Emeritus at Harvard University
February 10, 2016
Dr. Lawrence Summers visited Johns Hopkins SAIS to offer insight on the state of the global economy and the factors shaping economic policy-making.
Amid concerns that a global recession may be looming in 2016, Summers pointed to persistently low interest rates as a sign that the standard monetary policy levers are no longer sufficient for generating growth. Summers said US economic gains will be anemic at less than two percent this year, and may even dip into a recession this year or next. More active and expansionary government efforts are needed worldwide to avoid a downturn, according to Summers.
“My greatest fear is that we will become captured in a vicious cycle in which poor results will lead to a loss of confidence in governments and other larger institutions,” Summers said. “A great deal is at stake to accelerate economic growth and to make the fruits of that economic growth be more widely shared.”
On the economic challenges facing China, Summers said the global commodities boom driven by Chinese demand is near its end. In terms of US-China strategy, he added that now is exactly the wrong moment to embrace the view of those who believe we need to economically contain China. “We should avoid doing anything that creates a sense that we are nervous about Chinese economic success,” Summers said. “For us to present ourselves that way, particularly in a period when they’re already having difficulty, would be to take a substantial risk, with respect to what is obviously a vitally important relationship between our two countries for the future of the world.”