BANGKOK - Chicago Federal Reserve Bank President Charles Evans said Monday that the global economy can't rely on the spending of U.S. consumers to pull it out of the current downturn.
"I just have to tell you - if you don't know this already, if you haven't heard enough, that that American consumer doesn't exist anymore. The American consumer is challenged by a reduction in resident house prices that one way or another has taken on more mortgage debt or they did through bad planning, moral hazard or bad luck and they face employment risk," he said in a question and answer session after giving a speech at the Sasin Bangkok Forum here.
"The chances they are going to expand their purchasing in order to apply a noticeable (push) to the world economy is not there any more. And so then the question is what keeps the world economy chugging in the circumstances?"
Evans said policymakers around the world are trying to work out the answer to that question. But "business models that worked for countries in the past are going to be challenged in this case."
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