Nouriel Roubini

"Roubini" redirects here. For the financial analysis firm, see Roubini Global Economics.

Nouriel Roubini
Roubini at the World Economic Forum Annual Meeting, January 27, 2012
Born	(1958-03-29) March 29, 1958 Istanbul, Turkey
Nationality	American
Academic career
Field	International economics
Institution	New York University
Alma mater	Bocconi University (B.A. 1982) Harvard University (Ph.D. 1988)
Influences	Larry Summers Jeffrey Sachs
Information at IDEAS / RePEc

Nouriel Roubini (born March 9 1958) is a Turkish-born Iranian-American economist. He is a Professor Emeritus since 2021 at the Stern School of Business of New York University.

After receiving a BA in political economics at Bocconi University, Milan and a doctorate in international economics at Harvard University, he was an academic at Yale and a visiting researcher/advisor at the International Monetary Fund (IMF), Federal Reserve, World Bank, and Bank of Israel. His early research focused on emerging markets. During the administration of President Bill Clinton, for one year he was a senior economist for the Council of Economic Advisers, and the following year he was a senior adviser to Timothy Geithner (who was then the Treasury Department undersecretary for international affairs).

Early life and education

Roubini was born in Istanbul, Turkey, to Iranian-Jewish parents. When he was a year old, his family lived briefly in Tehran, Iran; when he was three years old, the family moved to Tel Aviv, Israel. From 1962 to 1983 he lived in Italy, especially in Milan, where he attended the local Jewish school and then the Bocconi University, earning a B.A., summa cum laude, in economics. In 2009 he was named Bocconian of the Year in recognition of his work. He received a Ph.D. in international economics from Harvard University in 1988, where his adviser was Jeffrey Sachs. Roubini is a US citizen.

Career

For much of the 1990s, Roubini combined academic research with policy making by teaching at Yale and then in New York, while also being employed at the International Monetary Fund, Federal Reserve, World Bank, and Bank of Israel. Currently, he is a professor emeritus at the Stern School of Business at New York University. He said: "I've been studying emerging markets for 20 years, and saw the same signs in the U.S. that I saw in them, which was that we were in a massive credit bubble [as 2008 approached."

In 1998-99, he worked for one year in the Clinton administration as a senior economist in the Council of Economic Advisers. In 1999-2000, he worked for a year at the Treasury department as a senior adviser to Timothy Geithner (who was then the undersecretary for international affairs).

Roubini returned to the IMF in 2001 as a visiting scholar while it faced a financial meltdown in Argentina. He cowrote a book on saving bankrupt economies entitled, Bailouts or Bail-ins? and launched his own consulting firm.

He credits a number of economists for his view of economics, saying: “One person who has had a great impact on me intellectually was my adviser at Harvard, Jeffrey Sachs.. He is both a rigorous academic and very human, involved in big picture issues... Another intellectual hero is Larry Summers, the former President of Harvard.

Personal investments

During an interview in June 2009, he was asked about his personal lifestyle expenses and other investments. He said, "I regularly save about 30% of my income. Apart from my mortgage, I don't have any other debts. The credit crunch hasn't affected me much.... I've always lived within my means and, luckily, have never been out of work. I would say I'm a frugal person—I don't have very expensive tastes.... You don't need to spend a lot to enjoy things." Asked whether he invests in stocks, he replied, "Not as much these days. I used to have a lot in equities—about 75%—but over the past three years, I've had about 95% in cash and 5% in equities. You're not getting much from savings these days but earning 0% is better than losing 50%. ... I don't believe in picking individual stocks or assets. ... Never invest your money as though you are gambling at the casino. Buying and selling individual stocks is a waste of time."

Economic forecasts

Roubini says that his economic approach is "holistic." Rather than primarily study mathematical models and formulas, he draws his ideas from history, literature, and international politics.

Roubini is one of the economists, along with economist Stephen Roach, analyst Meredith Whitney, and investment advisers like Gary Shilling, Peter Schiff, and Marc Faber, who predicted the crash of 2007–08. He warned about the crisis in an IMF position paper in 2006.

Roubini's predictions have earned him the nicknames "Dr. Doom" and "permabear" (economist slang for someone who continually projects downturns) in the media. In 2008, Fortune magazine wrote, in an article entitled "Eight Who Saw it Coming . . . and eight who didn't," "In 2005 Roubini said home prices were riding a speculative wave that would soon sink the economy. Back then the professor was called a Cassandra. Now he's a sage". The New York Times noted that he foresaw "homeowners defaulting on mortgages, trillions of dollars of mortgage-backed securities unraveling worldwide and the global financial system shuddering to a halt". In September 2006, he warned a skeptical IMF that "the United States was likely to face a once-in-a-lifetime housing bust, an oil shock, sharply declining consumer confidence, and, ultimately, a deep recession". Nobel laureate Paul Krugman added in 2009 that his once "seemingly outlandish" predictions were matched "or even exceeded by reality."

However, financial journalist Justin Fox observed in the Harvard Business Review in 2010 that "In fact, Roubini didn’t exactly predict the crisis that began in mid-2007... Roubini spent several years predicting a very different sort of crisis — one in which foreign central banks diversifying their holdings out of Treasuries sparked a run on the dollar — only to turn in late 2006 to warning of a U.S. housing bust and a global 'hard landing'. He still didn’t give a perfectly clear or (in retrospect) accurate vision of how exactly this would play out... I’m more than a little weirded out by the status of prophet that he has been accorded since." Others noted that "The problem is that even though he was spectacularly right on this one, he went on to predict time and time again, as the markets and the economy recovered in the years following the collapse, that there would be a follow-up crisis and that more extreme crashes were inevitable. His calls, after his initial pronouncement, were consistently wrong. Indeed, if you had listened to him, and many investors did, you would have missed the longest bull market run in US market history." Another observed: "For a prophet, he’s wrong an awful lot of the time." Tony Robbins wrote: "Roubini warned of a recession in 2004 (wrongly), 2005 (wrongly), 2006 (wrongly), and 2007 (wrongly)" ... and he "predicted (wrongly) that there'd be a 'significant' stock market correction in 2013." Speaking about Roubini, economist Anirvan Banerjee told The New York Times: "Even a stopped clock is right twice a day." Economist Nariman Behravesh said: "Nouriel Roubini has been singing the doom-and-gloom story for 10 years. Eventually something was going to be right."

In January 2009, Roubini predicted that oil prices would stay below $40 for all of 2009. By the end of 2009, however, oil prices were at $80. In March 2009, he predicted the S&P 500 would fall below 600 that year, and possibly plummet to 200. It closed at over 1,115, up 24%, the largest single year gain since 2003. CNBC's Jim Cramer wrote that Roubini was "intoxicated" with his own "prescience and vision," and should realize that things are better than he predicted; Roubini called Cramer a "buffoon," and told him to "just shut up"). In 2009 he also predicted that the US government would take over and nationalize a number of large banks; it did not happen. In October 2009 he predicted that gold "can go above $1,000, but it can’t move up 20-30%”; he was wrong, as the price of gold rose over the next 18 months, breaking through the $1,000 barrier to over $1,400. Although in May 2010 he predicted a 20% decline in the stock market, the S&P actually rose about 20% over the course of the next year (even excluding returns from dividend. In 2012, Roubini predicted that Greece would be ejected from the eurozone, but that did not happen. The Financial Times observed that in 2020 when the Covid-19 pandemic arrived, he said that policymakers would not mount a large fiscal response. However -- they did. Also in 2020, he predicted that a US-Iran war was likely.

By highlighting some of his many past predictions as being accurate, Roubini has promoted himself as a major figure in the U.S. and international debate about the economy, and spends much of his time shuttling between meetings with central bank governors and finance ministers in Europe and Asia. Although he is ranked only 985th in terms of lifetime academic citations, he was No. 4 on Foreign Policy magazine's list of the "top 100 global thinkers." In 2011 and 2012, he was named by the magazine as one of the Top 100 Global Thinkers. In 2013 Roubini was awarded by Global Thinkers Forum its honorary 2013 Award for Excellence in Global Thinking.

US economy

In the 1990s, Roubini studied the collapse of emerging economies. He used an intuitive, historical approach backed up by an study of theoretical models to analyze these countries and came to the conclusion that a common denominator was the large current account deficits financed by loans from abroad. Roubini theorized that the United States might be the next to suffer, and as early as 2004 began writing about a possible future collapse. Business Week magazine writer Michael Mandel, however, noted in 2006 that Roubini and other economists often make general predictions which could happen over multiyear periods.

In September 2006, he foresaw the end of the real estate bubble: "When supply increases, prices fall: that's been the trend for 110 years, since 1890. But since 1997, real home prices have increased by about 90 percent. There is no economic fundamental—real income, migration, interest rates, demographics—that can explain this. It means there was a speculative bubble. And now that bubble is bursting." In the Spring 2006 issue of International Finance, he wrote an article titled "Why Central Banks Should Burst Bubbles" in which he argued that central banks should take action against asset bubbles. When asked whether the real estate ride was over, he said, "Not only is it over, it's going to be a nasty fall." By May 2009, he felt that analysts expecting the US economy to rebound in the third and fourth quarter were "too optimistic". He expected the full recession to last 24 or 36 months, and believed in the possibility of an "L-shaped" slow recovery that Japan went through in the Lost Decade.

In his opinion, much of the recession's cause was due to "boom-and-bust cycles," and he feels the US economy needs to find a different growth path in the future. "We've been growing through a period of time of repeated big bubbles," he said. "We've had a model of 'growth' based on overconsumption and lack of savings. And now that model has broken down because we borrowed too much." He feels that too much human capital went into financing the "most unproductive form of capital, meaning housing" and would like to see America create a model of growth in more-productive activities. He feels that "sustainable growth may mean investing slowly in infrastructures for the future, and rebuilding our human capital," by investing in renewable resources. "We don't know what it's going to be," he said, "but it's going to be a challenge to find a new growth model. It's not going to be simple."

Recovery from recession

In August 2009, Roubini predicted that the global economy would begin recovering near the end of 2009, but said the US economy was likely to grow only about 1% annually during the next two years, which would have been less than the three percent normal "trend." He said that the Fed was "now embarked on a policy in which they are in effect directly monetizing about half of the budget deficit," but that now "monetization is not inflationary," as banks were holding much of the money themselves and not relending it. When these attitudes reverse at the end of the recession, that would be time for an "exit strategy, of mopping up that liquidity" and taking some of the money back out of circulation, "so it doesn't just bid up house prices and stock values in a new bubble. And that will be 'very, very tricky indeed,'" he stated. Also, in late July, he warned that if no clear exit strategy is outlined and implemented, there was the potential of a perfect storm: fiscal deficits, rising bond yields, higher oil prices, weak profits, and a stagnant labor market, which combined could "blow the recovering world economy back into a double-dip recession."

Global economy

2006

In the summer of 2006, Roubini wrote that the U.S. was headed into a long and "protracted" recession due to the "collapse" of house prices, which he noted were already in freefall.

With regards to Europe, Roubini predicted that Italy, and possibly a series of other eurozone countries (Portugal, Spain, Greece) might have to exit the eurozone if they did not implement "serious economic reforms." "[It] is not a foregone conclusion but, if Italy does not reform, an exit from EMU within 5 years is not totally unlikely. Indeed, like Argentina, Italy faces a growing competitiveness loss given an increasingly overvalued currency and the risk of falling exports and growing current account deficit. The growth slowdown will make the public deficit and debt worse and potentially unsustainable over time. And if a devaluation cannot be used to reduce real wages, the real exchange rate overvaluation will be undone via a slow and painful process of wage and price deflation."

2009

As of January 2009, he remained pessimistic about the U.S. and global economy. He said in September, 2008, "we have a subprime financial system, not a subprime mortgage market". "As the U.S. economy shrinks, the entire global economy will go into recession. In Europe, Canada, Japan, and the other advanced economies, it will be severe. Nor will emerging market economies—linked to the developed world by trade in goods, finance, and currency—escape real pain."

Roubini said that the subprime issues are a global, and not just a U.S. problem. In an interview with author James Fallows in late spring of 2009, he stated, "People talk about the American subprime problem, but there were housing bubbles in the U.K., in Spain, in Ireland, in Iceland, in a large part of emerging Europe, like the Baltics all the way to Hungary and the Balkans. It was not just the U.S., and not just 'subprime.' It was excesses that led to the risk of a tipping point in many different economies."

His pessimism is focused on the short-run rather than the medium or long-run. In Foreign Policy (Jan/Feb 2009), he writes, "Last year's worst-case scenarios came true. The global financial pandemic that I and others had warned about is now upon us. But we are still only in the early stages of this crisis. My predictions for the coming year, unfortunately, are even more dire: The bubbles, and there were many, have only begun to burst".

At a conference in January, 2009, he said, the U.S. banking system was "effectively insolvent." He added that the "systemic banking crisis. ... The problems of Citi, Bank of America and others suggest the system is bankrupt. In Europe, it's the same thing." To deal with this problem, he recommends that the U.S. government "do triage between banks that are illiquid and undercapitalized but solvent, and those that are insolvent. The insolvent ones you have to shut down." He adds, "We're in a war economy. You need command-economy allocation of credit to the real economy. Not enough is being done," he felt at the time.

In December 2009, as the price of gold exceeded $1,200 an ounce, Roubini said it looked "suspiciously like a bubble." However, by September 2012 gold was trading at $1,700. He still predicted that it was a risky bet, saying that it would take "another Armageddon" to make the price of gold rise again.

2010

In 2010, he again warned that despite an improved economy with rising stock markets, the crisis was not over and new bubbles were on the horizon: “We are just at the next stage. This is where we move from a private to a public debt problem ... We socialised part of the private losses by bailing out financial institutions and providing fiscal stimulus to avoid the great recession from turning into a depression. But rising public debt is never a free lunch, eventually you have to pay for it.”

In late May 2010, markets around the world began dropping due partly to problems in Greece and the Eurozone. "Roubini believes Greece will prove to be just the first of a series of countries standing on the brink," writes the Telegraph. Roubini explains the new issues governments must deal with: “We have to start to worry about the solvency of governments. What is happening today in Greece is the tip of the iceberg of rising sovereign debt problems in the eurozone, in the UK, in Japan and in the US. This ... is going to be the next issue in the global financial crisis.

Roubini met officials in China during spring 2009, and pointed out that many Chinese commentators blame American "overborrowing and excess" for dragging them into a recession. However, he stated that "even they realize that the very excess of American demand has created a market for Chinese exports." He adds that although Chinese leaders "would love to be less dependent on American customers and hate having so many of their nation's foreign assets tied up in U.S. dollars," they're now "more worried about keeping Chinese exporters in business. ... I don't think even the Chinese authorities have fully internalized the contradictions of their position."

2011

Roubini and political scientist Ian Bremmer described the 21st century world as fragmenting economically and politically, where the "old models of understanding global dynamics are struggling" to keep up with rapid changes. In an article in Foreign Affairs magazine, they describe what they call a "G-Zero world," where the United States no longer has the resources to continue as the primary provider of global public goods. As a result, there is likely to be more conflict than cooperation between countries, creating a "zero-sum game," a "game in which my win is your loss." They explain their rationale:

Europe is fully occupied for the moment with saving the eurozone. Japan is likewise tied down with complex political and economic problems at home. None of these powers' governments has the time, resources, or domestic political capital needed for a new bout of international heavy lifting. Meanwhile, there are no credible answers to transnational challenges without the direct involvement of emerging powers such as Brazil, China, and India. Yet these countries are far too focused on domestic development to welcome the burdens that come with new responsibilities abroad.

We are now living in a G-Zero world, one in which no single country or bloc of countries has the political and economic leverage—or the will—to drive a truly international agenda. The result will be intensified conflict on the international stage over vitally important issues, such as international macroeconomic coordination, financial regulatory reform, trade policy, and climate change. This new order has far-reaching implications for the global economy, as companies around the world sit on enormous stockpiles of cash, waiting for the current era of political and economic uncertainty to pass. Many of them can expect an extended wait.

2012

Roubini at the Global Governance event of the Monterrey Institute of Technology and Higher Education, Mexico City, 2012

In July 2012, Roubini predicted a global “perfect storm” in 2013, with economies all over the world slowing down or completely halting.

2014

By May 2014, Roubini had become bullish, arguing many of the risks to the global economy had receded. He pointed to an improving European economy and stronger euro, steadying of the economy in Japan, and a marked improvement in the United States. He praised the Federal Reserve for its unconventional monetary policy, which he forecast would last for a few more years, supporting equity markets.

2017

At the start of 2017, Roubini speculated that the election of Donald Trump as president might portend a geopolitical shift away from globalization and more toward isolationism, a change which he felt could lead to global instability and rising military conflicts among other countries.

2018

Roubini delivered a blistering attack on cryptocurrency to a U.S. Senate Banking Committee.

Roubini in 2018 was a member of the Berggruen Institute's 21st Century Council.

2019

In November 2019, he wrote "Nine Reasons Why the Stock Markets Are Far Too Optimistic".

2020

On February 17, 2020, he warned of financial vulnerabilities that "could trigger severe economic, financial, political, and geopolitical disturbances unlike anything since the 2008 crisis." Two days later, the market peaked prior to what would become the 2020 stock market crash. Following a relatively minor decrease, Roubini warned on February 24 that the markets were still too complacent about coronavirus, predicting a government response followed by positive market reaction, which would then fizzle.

Cryptocurrencies

He is a frequent critic of cryptocurrencies like Bitcoin. He tweeted: "99% of crypto land is one shitcoin traded for another shitcoin. And the average shitcoin lost 90% or more of its value in the last year. So Crypto Land is Crap Land, a cesspool of lunatics with severe Freudian scatological obsessions that swim 24/7 in their own stinking shit." He views blockchain technology as "the byword for a libertarian ideology that treats all governments, central banks, traditional financial institutions, and real-world currencies as evil concentrations of power that must be destroyed." As to cryptocurrencies and blockchain, he regards this position as both utopian and at bottom "about greed" on the part of their promoters. In 2018, he told Ethereum founder Vitalik Buterin to "just shut up." In 2019, he called BitMEX CEO Arthur Hayes a "sleazy coward," and told him to "shut up."

Consulting business

He formed Roubini Global Economics, a small economic consultancy for financial analysis. In describing the purpose of RGE Monitor, he said, "the world is my home, so everything about society and culture—no matter how miniscule [sic]—is worth knowing. I am an information junkie and created RGE Monitor to collect information about what's happening around the world." As of 2011, the firm was not profitable Roubini said: "The most important thing in this kind of business is that you have to be right day in and day out. The fact that I made a right call a few years ago doesn’t matter." He closed the firm in 2016.

Personal life

Helaine Olen described him as having "an accent reminiscent of a James Bond villain, and a laugh that seems to kick in on a one-second tape delay." The Financial Times wrote: "when you meet him, his unflinching, unsmiling, uncompromising negativity feels like a break with normal human coping mechanisms." He speaks English, Persian, Italian, Hebrew, and conversational French. Roubini likes to refer to himself as a "global nomad", and says, "You can be sitting still surfing the Internet, and experience other worlds, ideas and societies. But I've found that there is nothing better than visiting a different country, even if for three days. ... [Y]ou can't only be a virtual Global Nomad, with goggles on, in a virtual reality. You have to be there. You have to see it, smell it and live it. You have to see people, travel, and interact."

Roubini is identified as a Democrat in his profile on Wall Street Economists. Roubini announced on Twitter in early 2014 his new practice of Transcendental Meditation.

Asked to describe his parties at his apartment, Roubini said: "I look for ten girls to one guy." He added that his friend Bill Clinton was a fan of this ratio.

When Nick Denton, a journalist and the founder of Gawker.com, wrote a post labeling Roubini a playboy who lived in a "vulva" and "vagina-encrusted Tribeca loft", Roubini posted a message on Denton's Facebook page, accusing him of "Nazi-style anti-Semitism." When asked about the exchange by a reporter for The Guardian, Roubini then "reprises the rant, embellishing it with references to the KGB, Denton's sexual orientation and a sweary suggestion of what the man might do with himself, which he belatedly asks me not to quote.... the piece of art in question is described by Roubini as the work of a highly regarded feminist artist whom he won't name and which doesn't, he assures me, look anything like a vulva." Denton for his part commented: "How can such a brilliant economist, at the height of his reputation, be quite so clueless?"

Roubini does not want to have children, and cites various threats as a basis for his position. He also says that: “If stuff happens, I’d rather die than live in a world that is dystopian.”

Writings

• 2022 (Oct): MegaThreats: Ten Dangerous Trends That Imperil Our Future, And How to Survive Them, Little Brown
• 2010: Crisis Economics: A Crash Course in the Future of Finance, Penguin Press
• 2006: (editor with Marc Uzan) New International Financial Architecture, Edward Elgar Publishing
• 2004: (with Brad Setzer) Bailouts or Bail-ins? Responding to Financial Crises in Emerging Economies, Peterson Institute
• 1997: (with Alberto Alesina & Gerald D. Cohen) Political Cycles and the Macroeconomy, MIT Press

Research

• International macroeconomics and international finance
• Macroeconomics and fiscal policy

Current appointments

• Research Fellow, National Bureau of Economic Research
• Member, Academic Advisory Committee, Fiscal Affairs Department, International Monetary Fund

External links

• Nouriel Roubini on Twitter
• Nouriel Roubini at Stern School of Business, New York University
• Column archive at Project Syndicate
• Roubini and Ian Bremmer discuss outlook for 2013 Reuters TV, January 14, 2013, video, 1 hr. and 11 min.
• "Nouriel Roubini". JSTOR.