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Nobel Prize-winning economist says he doesn’t see whatever resembles a recession in the U.S.

Thaler, the 2017 recipient of the Nobel Memorial Prize in Economic Sciences, is most beneficial known for his work in behavioral economics.

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Nobel Prize-winning economist Richard Thaler says the U.S. could have recorded two successive quarters of economic contraction, but it’s “just funny” to spell it out it to be a recession.

“I don’t see whatever resembles a recession. We’ve record low unemployment, record high vacancies. That appears like a solid economy,” Thaler told CNBC’s Julianna Tatelbaum on Wednesday.

“The economy keeps growing, it’s just growing slightly less fast than prices. And which means real GDP fell a bit, but I believe it’s just funny to call a recession,” he said. “It isn’t like any recession we’ve observed in my rather long life time.”

U.S. gross domestic product, or GDP, fell by 0.9% year-on-year in the next quarter, carrying out a 1.6% decline in the initial quarter. Two consecutive falls in GDP growth meet up with the traditional definition of a recession. Officially, the National Bureau of Economic Research declares recessions and expansions, and likely won’t create a judgment on the time involved for months.

Thaler, the 2017 recipient of the Nobel Memorial Prize in Economic Sciences, is most beneficial known for his work in behavioral economics and for explaining the so-called “hot hand” fallacy alongside singer Selena Gomez in the 2015 film “The Big Short.”

His work talks about how people make decisions which are seemingly irrational in accordance with economic theory, and his co-written book, “Nudge: Improving Decisions About Health, Wealth, and Happiness,” describes how this could be used to generate better public policy solutions and “nudge” human behavior.

Inflation outlook

Asked about U.S. inflation, which rose 8.5% year-on-year in July, Thaler said, “There is this long debate about whether inflation was transitory or not, and team permanent appears to be winning, though I believe they might be declaring victory a touch too quickly.”

Inflation may be the rate of change in prices instead of high prices, he noted.

“At the very least a few of the high prices we’re observing are caused directly either by the war in Ukraine or by supply chain problems from China. And hopefully that both of these factors are temporary,” he said.

“Perhaps a year from there it’s still fighting in Ukraine and there it’s still Covid in China, but hopefully that that isn’t the case, and when one or both of these problems is mitigated i quickly could see some prices heading down.”

Thaler also addressed U.S. wages, that have stagnated against productivity because the 1970s but recorded sharp rises in both latest quarters amid a good labor market, reportedly spooking the Federal Reserve on the prospect of a wage-price spiral.

“EASILY was the top of a union, I’d certainly be requesting a large raise next year to pay my workers for the bigger prices they’re facing,” Thaler said.

“I’d say if that occurs once, personally I’d applaud that, because individuals who are getting wages, what we’re calling wages, will be the those who have been lagging behind the 1% when it comes to how much cash they’re making,” he continued.

“Certainly everywhere I go you see signs of a shortage of labor, and offer and demand says wages is going up. I cannot get into a restaurant in the U.S. it doesn’t have a ‘help wanted’ register the entranceway. So wages are likely to rise, and I believe that’s good.”

CNBC’s Jeff Cox contributed to the article.

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