As the credit crisis continues to bite around the world, two eminent economists have predicted the United States will most likely fall into a recession next year.
The former chairman of the US Federal Reserve, Dr Alan Greenspan, says a recession is a 50 per cent chance while the chairman of the global investment bank Morgan Stanley, Stephen Roach, is tipping an even greater risk.
Both agree it will be impossible for other countries to avoid the impact of a slowdown in the world's biggest economy.
Speaking on America's ABC network, Dr Greenspan said the prediction was probably understated given the fear and suspicion in global credit markets.
"The probabilities of a recession have moved up to close to 50 per cent," he said.
"Whether it's above or below is really extraordinarily difficult to tell.
"The real story is, with the extraordinary credit problems we're confronting, why the probabilities are not 60 per cent or 70 per cent."
While Dr Greenspan believes the US Federal Reserve must be free to act, he says interest rates will continue to fall as the US economy moves into what he describes as "stall speed".
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