A recipient of the 2001 Nobel Prize for Economics has warned that a US war against Iraq would have a "very negative" impact on the global economy.
Mr Joseph Stiglitz also accused President George W. Bush of "mismanagement" of the US economy and forcing a global downturn on the rest of the world.
Speaking at the World Knowledge Forum in Seoul, Mr Stiglitz said many people hoping for an economic boom from a war on Iraq would be disappointed.
"This current war, if it occurs, is likely to have a high probability of having a very negative impact," he told journalists.
"The benefit in terms of the economics of that stimulus [from a US-Iraq war] is likely to be more than offset by the adverse effect that uncertainty is having on investment, consumption and the possible adverse effects on oil prices," he said.
"This is a very different kind of situation from World War II. Therefore, [there are] much more downside effects in terms of the global economy," he said.
He admitted there was also a possible scenario that the war ends quickly and that Iraqi oil enters the market, sending oil prices down, stimulating the global economy.
"But one has to face up to the fact that there is a significant probability of some very adverse economic effects and that if the war is not quick or even it is quick there can be turmoil all throughout the Middle East," he said.
He said other oil producing countries in the region have underlying political problems and a war on Iraq might catalyse those political difficulties.
He criticised the Bush administration for opting for tax cuts over stimulus packages he and other economists advocated to counter the economic downturn which started setting in when Mr Bush took office two years earlier.
"Now I believe quite strongly that the Bush administration has mismanaged economic policy for the past two years," said Mr Stiglitz, a Columbia University professor.
He said tax cuts benefited a few rich people while people who really needed the money, including the unemployed, got very little.
Prospects for the US economy remain clouded, he said as state governments face a budget crunch because of reduced revenues which is forcing them to cut expenditure, depressing the US economy further, he said.
"He (Bush) could have done something about that but he chose not to. So in my mind there has been a very serious lack of economic management directed at problems that the US has faced," he said.
He noted that he and other economists had warned of an in-built tendency in the US economy towards slowdown which would not recover quickly unless the it had stimulus.
"And yet they refused to put forward a serious stimulus package. Rather they pushed down this tax cut that was not really acting as adequate stimulus," he said.
- Mr Stiglitz was the chairman of the Council of Economic Advisers during the Clinton administration and a former chief economist at the World Bank.
AFP