The World Bank has appointed Harvard professor Carmen Reinhart as chief economist and vice president. This means that the organization, which used to be a man’s stronghold, chooses a woman as its main expert for the second consecutive time.
The choice for Reinhart is no coincidence. The World Bank has brought an expert on economic crises on board with her. And that is particularly useful in the global corona crisis. The number of developing countries that are experiencing financial difficulties is growing rapidly due to the corona crisis and the low oil price. In addition, many emerging economies are facing massive capital flight, which is exacerbating the situation.
Reinhart is best known for the book This time it’s different, which she wrote with economist Kenneth Rogoff. In this history of eight centuries of financial crises, the authors paint the picture that countries repeatedly fall into the same economic pitfalls, making new crises inevitable.
Rather than U-shape
Reinhart is pessimistic about the outcome of this crisis. “I believe more in a recovery in the form of a U than in a V,” the Harvard professor recently said in an exclusive interview with this newspaper. “I expect more corporate bankruptcies and countries that will go bankrupt than during the financial crisis. The blow is yet to come in Latin America and Africa. ”
Reinhart is also part of a new group of advisers that IMF CEO Kristalina Georgieva created to deal with the corona crisis.