Financial crisis terrifying: Nobel winner Krugman
2008-10-13

Nations U.S. States New Jersey Category Regions People Paul Krugman Gordon Brown Event Global Financial Crisis University Princeton University Source (AFP)

Nobel economics prize winner Paul Krugman said Monday that the global financial crisis is "terrifying," but expressed cautious hope that a corner is being turned.

The Princeton University professor, who was awarded the prestigious prize earlier Monday, told a press conference that "it's terrifying."

However, he welcomed efforts by European Union leaders to calm the situation, especially praising British Prime Minister Gordon Brown. "I am more comfortable now than I was a few days ago," he said.

Krugman , 55, was speaking at Princeton in New Jersey hours after hearing that he had been awarded the Nobel.

He also offered a reassuring note, saying that much of the US economy remained sound, despite the collapse of Wall Street.

"It's not the whole engine that's broken, it's one specific piece," he said in a live telephone relay of the press conference.

Krugman, known for his popular style and sense of humor, brought the house down with a quip in answer to a question over where he kept his money.

"A lot of it is in cash ... in the backyard," he said to laughter.

Following Sunday's summit, European governments launched a multi-pronged attack to combat the financial crisis, approving hundreds of billions of dollars in loans and buying into banks in a move to end panic on the markets.

Krugman, a harsh critic of the White House's handling of the turmoil, earlier told Swedish television: "I never thought I would see anything that looked like 1931 in my lifetime, but in many ways this crisis does."

Nobel website