US Economy: Nobel Prize Economist Krugman Sees 30-40% Chance of another U.S. Recession in 2010

Nobel Prize-winning economist Paul Krugman said he sees about a one-third chance the U.S. economy will slide into a recession during the second half of the year as fiscal and monetary stimulus fade.

“It is not a low probability event, 30 to 40 percent chance,” Krugman, an economics professor at Princeton University, said today in an interview in Atlanta, where he was attending an economics conference. “The chance that we will have growth slowing enough that unemployment ticks up again I would say is better than even.”

Krugman, 56, said the Federal Reserve’s plan to end purchases of $1.25 trillion of mortgage-backed securities and about $175 billion of federal agency debt in March could spur an increase in mortgage rates and lead to declines in home sales and prices.

For the complete report: Krugman Sees 30-40% Chance of U.S. Recession in 2010 (Update1) - BusinessWeek