“This is a different kind of crisis than normal crises. It’s just not a problem of aggregate demand,” said Joseph Stiglitz, former chief economist at the World Bank.

By Joseph Stiglitz – Mar 17, 2020

Aggressive policy action by the Federal Reserve is “obviously not” enough to help the U.S. avert a downturn caused by the coronavirus outbreak, said Joseph Stiglitz, a Nobel laureate in economics.

“Given the nature of the uncertainties, given the nature of the collapsing incomes of so many people, it can help stabilize financial markets at best and it’s clear that it didn’t do that,” Stiglitz told CNBC on Tuesday.

On Sunday, the Fed slashed interest rates to near-zero and announced a $750 billion asset-purchasing program to shelter the economy from the impact of the virus. Despite that, the markets crashed Monday — with the Dow suffering its worst day since the “Black Monday” market crash in 1987 and its third-worst day ever.

Originally Published in CNBC. Read the entire story here