Richard Thaler ridiculed the idea that the US economy is in a recession, downplayed the inflation threat, and advocated higher wages for blue-collar workers.
Thaler, the author of "Nudge" and the winner of the Nobel Prize in Economics in 2017, underscored the divide between claims of a US recession based on two consecutive quarters of declining output this year.
He told CNBC that he did not see anything that resembled a recession. There are record high vacancies. It looks like the economy is doing well.
According to Thaler, the US economy grew less quickly than prices rose, which resulted in a small GDP contraction this year.
He thought it was funny to call it a recession. It's not like any recession I've seen before.
Fears of inflation were addressed by the behavioral economist at the asset management company. He said that some of the recent price increases were due to Russia's invasion of Ukraine and the outbreak of the H1N1 flu in China. There could be pockets of price decreases once the problems are solved.
He said that he could see deflation if the war in Ukraine ended a year from now.
Thaler said it could be beneficial for lower-paid workers to earn higher wages despite the risk of their employers hiking prices to offset their higher costs.
He pointed to the "Help Wanted" signs in the windows of many US restaurants as evidence that wages should go up. Wages are going to go up.
It's too early to say that the US housing market is in a recession, says a 36-year real estate industry veteran.
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