'Act Now' Urges IMF Head, Warning of Recession Risks

'Risk of recession outweighs risk of inflation,' says Lagarde
By Mark Russell,  Newser Staff
Posted Aug 29, 2011 2:00 AM CDT
IMF head Christine Lagarde called for firm political action and more spending at the Economic Policy Symposium at Jackson Hole in Moran, Wyo., on Saturday.   (AP Photo/Reed Saxon)

(Newser) – IMF head Christine Lagarde warned that the world economic recovery is in danger, and called for additional spending to support growth, at a conference for business and economic leaders in Jackson Hole on Saturday, reports Reuters. "The stakes are clear; we risk seeing the fragile recovery derailed. So we must act now," she warned, saying that "the risk of recession outweighs the risk of inflation."

Lagarde said she preferred "mandatory substantial recapitalization" to come from private spending, but government spending was possible, too, if necessary. "Put simply, macroeconomic policies must support growth." For Europe, Lagarde said that the key was building confidence, through better financial rules and supporting European banks. For the United States, she recommended programs to reduce homeowner debt.

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