The US-economist: Trump has done crazier things than I expected

exactly two years ago, when a newly elected Donald Trump took over as U.S. president, predicted Kenneth Rogoff, professor at Harvard and former chief economist at the International monetary fund, the IMF, the US economy would take off and grow in the next two years.

Two years later, it is clear that he got it right. In a DN interview during the World Economic Forum in Davos, he provides, however, another explanation for the increase than the White house is peddling.

– My main reason for optimism was that it was a recovery from the financial crisis. So the good growth has not in itself had nothing to do with Trump to make.

in the day that he was wrong on one point:

Trump says admittedly idiotic things, mainly to satisfy the needs of its ushered a major period, but I never thought he would go all the way and actually implement the most crazy ideas. But he has gone further in trade wars than I ever feared, and with the close down of the state apparatus, he has reached the ”crazyland”.

Last year, showed Trump up in Davos – unlike this year – and received the financial community applause for their tax cuts and deregulation. This year, the mood is more cautious, in particular, on the basis of trade wars and the new skyddstullarna.

that Trumps destructiveness is worse than expected, and that it is detrimental to the economy, but it has gone so well is partly due to the US's starting position was so strong.

" If not the Federal Reserve (the U.S. central bank, DN note.) decides if a sharp interest rate hike, the US has decent conditions for a continued growth, despite the chaotic policies.

He sees, above all, a risk to Trumps attack on all society's institutions – the central bank, the courts, the media – have long-term adverse effects on the economy.

the USA's strength is its institutions, and it may happen that we will come out of this with stronger institutions that have shown the public that they can resist all attacks. But five-to ten-year term, Trump's attacks on the institutions seriously damage the trust and investments.

– It is very weak, with some exceptions, there is no other way to assess it. What I fear is that if we get a crisis of any kind would be problematic. Another way to say it is that during the first two years of the Trump presidency is the only crisis – Trumps the presidency. What if it happens something really serious?

Kenneth Rogoff is not particularly worried that China's economic slowdown will drag down the U.S. economy.

– It will have effect on the equities markets, however, more in Europe than in the united states, which also has slowed down Germany. But it is likely to affect not the real economy so much.

" No, I think that China is experiencing a sharp decrease of productivity, because they have two opposing goals; to create a more diversified economy and at the same time, an increasingly centralized state power. The private sector is terrified, they are afraid to be locked up in prison, that their companies should be taken away from them, and local executives are afraid to start infrastructure projects. It is a produktivitetschock, while those who analyse it as a efterfrågechock miss what is going on.

" the Timescale is much longer than in most forecasts. It is still a likely output that China is the dominant economy in a hundred years, but it's not going to happen in 20-30 years. They have too many difficulties to overcome first.

He says that his more cautious predictions, and warnings, that no country ever can have a GDP growth of 8-10 per cent, the former was met by the sharp backdrop. But now, most agree that China's ”guardians” has reached the end of the road.

with respect to united states policy toward China Kenneth Rogoff to give Trump the right in one respect.

" We had to do something about the chinese theft of intellectual property, they did not play according to the rules. On the other hand, is a skewed balance of trade is not a breach of international laws. In fact, their trade surplus with us has been very favorable; it has given the world cheap goods and cheap financing.

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