The following is an excerpt from: Moneynews.com | January 27, 2012 |
U.S. economic growth may not top 2 percent this year and a third round of quantitative easing by the Federal Reserve would have little effect, said Martin Feldstein, a professor of economics at Harvard University.
“We’re going to have a hard time reaching 2 percent this coming year,” he said in an interview on Bloomberg Television’s “InsideTrack” with Sara Eisen in New York. The economy is still in a “danger zone,” Feldstein said, even as the recession risk “is less now than it was.”
The economy grew at a less-than-forecast 2.8 percent pace in the fourth quarter, with consumer spending at 2 percent, the government reported today. Inventory accumulation accounted for 1.9 percentage points of the total growth rate, setting the stage for fewer orders to factories in the first half of the year.
Feldstein, a member of the committee that dates recessions, said any move by the Fed to conduct a third round of quantitative easing, known as QE3, is “not the solution.” The economy wouldn’t “get much help from more monetary stimulus,” he said.
Federal Reserve policy makers this week pledged to…
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