Roubini Says No U.S. Default, But Warns on Europe

Nouriel Roubini offered a more optimistic outlook than usual today, at least in regards to matters concerning the U.S. debt ceiling and a possible default.

At a forum in Shanghai, China, Roubini stated that “There are about eight days until the deadline. My baseline scenario is still an agreement will be reached. I don’t think the U.S. will default.”

Roubini – the NYU economics professor known for his bearish calls on the U.S. economy prior to the 2008 financial crisis – did however issue a warning on other economies around the world.

He noted that in most developed economies – including the U.S., Europe, and Japan – growth will continue to be quite slow and economic recoveries will be U-shaped. Furthermore, he argued that the risk of sovereign debt crises in many European nations will continue to rise.

The recoveries have “been so weak because this was not a traditional recession,” Roubini continued, “but was a recession caused by a financial crisis brought on by too much debt and leverage first in the private sector and now in the public sector.”