Nobel laureate: Worst is over

Seoul - Nobel economics laureate Robert Mundell said on Thursday the worst of the world economic crisis is over and the US economy is in the recovery phase.

The winner of the 1999 Nobel Prize in economics also said there was a need to consider the possibilities of an Asian currency or an Asian Monetary Fund.

"The world economy is not in as bad shape as it appears from the news," he said in his keynote presentation at the World Leaders Forum held here to commemorate the 60th anniversary of the founding of South Korea.

"The real economy has not collapsed. The worst is behind us," he was quoted as saying by Yonhap news agency.

"The US growth was superb in the first three quarters of 2007. Then there were two quarters of nearly zero growth - a severe growth recession," said the professor of economics at Columbia University in New York.

Then during second quarter of 2008, the US growth rate shot up to 3.3%, he said, adding growth in the third quarter to September this year will "probably turn out to be about 2%."

Mundell pointed out that the pattern of the recent economic slowdowns in the US and European economies was similar to that in 2002.

"At that time, the US went first, then Europe followed it about eight months later," he said.

"The same pattern is with us now. The US is now in the recovery phase while Europe is retreating, giving rise to the huge swing of exchange rates," Yonhap quoted him as saying.

And regarding the need to think about an Asian currency or monetary fund, he said: "My view is that it is best for Asia to pursue both a regional approach or an international approach in response to the Europe-led increased regionalisation of the international monetary system."

- AFP