by Calculated Risk on 5/25/2009 02:09:00 PM

From Reuters: World economy stabilising says Krugman

"I will not be surprised to see world trade stabilise, world industrial production stabilise and start to grow two months from now," Krugman told a seminar [in the UAE].

"I would not be surprised to see flat to positive GDP growth in the United States, and maybe even in Europe, in the second half of the year."
...
"In some sense we may be past the worst but there is a big difference between stabilising and actually making up the lost ground," he said.

"We have averted utter catastrophe, but how do we get real recovery?

"We can't all export our way to recovery. There's no other planet to trade with."
emphasis added

And Krugman also suggested the GCC countries might consider abandoning the dollar peg, from BI-ME and Bloomberg: Gulf countries should drop dollar peg, says Paul Krugman

“You have a region that does as much trade with the eurozone as the United States,” Krugman, an economics professor at Princeton University in New Jersey, told reporters in Dubai. “If you feel that you must have a peg, the economics suggest that it ought to be a basket that reflects trade weights.”

I hope Krugman posts on his impressions of Dubai.