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Thursday, March 23, 2017

Nobel laureate in Economics predicted Russia Japanese disease

Nobel laureate Christopher Pissarides fears that the Russian economy could reach the Japanese disease. In the future, this means decades of sluggish growth and deflation.

photo: Gennady Cherkasov

Nobel prize 2010, Christopher Pissarides in an interview with Bloomberg put the “diagnosis” of the Russian economy. According to him, Russia follows the path of Japan, whose economy stagnated in recent years.

“The main risk is that Russia will get stuck in one place like Japan. But Japan has reached a very high level, and the risk that Russia will get stuck at a low level,” said Pissarides.

The Nobel laureate believes that Russia is behaving like a third world country which produces the raw material, sells it, and the proceeds spent on the purchase of goods abroad. “It’s tempting. If wealth is already here, ready, then why expend the effort? Take it, sell it, get the money,” said Pissarides.

In his opinion, the collapse of oil prices is “good” for Russia. The low prices on “black gold,” says Pissarides, can push the economy with the direction of industrialization and modernization.

In April, Cypriot economist Christopher Pissarides, speaking at a conference in St. Petersburg, said that Russia should forget about the oil to return to GDP growth. He stated that all the countries-oil producers are faced with the problem of economic growth is the “family curse” raw States. These include Venezuela, Saudi Arabia, Nigeria, and Russia.

Pissarides became Nobel prize winner in Economics in 2010. Award he shared with Americans Peter diamond and Dale Mortensen. The prize was awarded for “analysis of markets with the “rough search”, says RBC.

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