Stephen S. Roach
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- This article is about the Wall Street economist. For the Ambient music artist, see Steve Roach.
Stephen S. Roach is a senior executive with Morgan Stanley, the New York-based investment bank. After holding the position Chief Economist of Morgan Stanley for 16 years, Roach was promoted and named Chairman of Morgan Stanley's Asia operations in April 2007. Due to his generally pessimistic forecasts, Roach has been described as a "perennial bear." His views have been widely disseminated in print and on television, making him widely known among market professionals and the investing public.
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[edit] Career
Mr. Roach holds a Ph.D. in economics from New York University and a Bachelor's degree in economics from the University of Wisconsin-Madison.
After earning his Ph.D., Roach was a research fellow at the Brookings Institution in Washington, D.C. From 1972 until 1979, Mr. Roach served on the research staff of the Federal Reserve Board in Washington, D.C., where he supervised the preparation of the official Federal Reserve projections of the U.S. economy. From 1979 until joining Morgan Stanley, Mr. Roach was Vice President for Economic Analysis for the Morgan Guaranty Trust Company in New York.
Mr. Roach has been with Morgan Stanley since 1982, and has been the investment bank's chief economist since 1991 and has served as head of the firm's global team of economists in New York, London, Tokyo, Hong Kong, Singapore, and Paris. Read about Mr. Roach's own perspective on the highlights of his career [1] as an economist at Morgan Stanley.
[edit] Economic forecasts
Roach's bearish forecasts have drawn attention in the popular press, in particular after the 2001 world recession. In November 2004 Roach predicted an 'economic Armageddon', in part due to the record U.S. current account, trade and government deficits. According to some reports Roach in private predicted the chances of the US escaping a financial Armageddon were less than 10%. Roach has warned repeatedly that a dollar exchange rate could eventually force U.S. policy makers to raise interest rates.
The basis for Roach's pessimism is that some statistics show when government debt grows to greater than 50% of GDP, interest rates must go up dramatically or risk the chance for hyperinflation (in 2005 U.S. public debt was 64.7% of GDP according to the CIA's World Factbook[1]). Higher interest rates will dampen the U.S. economy if large deficits are present, a variant of the 'crowding out' thesis. The "crowding out" thesis is that capital goods investment falls when interest rates rise due to expansionary fiscal policy by government. As a result, economic growth is reduced if the government expansionary policy is not of the type that promotes growth (such as investment in infrastructure, research and development, or education). Roach has criticized the Federal Reserve and other central banks for keeping interest rates too low during the asset price bubbles of the past decade.
[edit] See also
[edit] References
[edit] External links
- Bio at Morgan Stanley's website
