The world economy needs a second stimulus if it is to avoid the fate of Japan in the 1990s when the country was stuck with years of sluggish growth, Nobel laureate and professor of economics Paul Krugman told CNBC Monday.
"The good news is that it does not look like the 2nd great depression. For a few months it did," Krugman said.
"Right now I think the world as a whole kind of looks like Japan in the early 90s. Not a catastrophe, but we really don't know how we get serious growth going," he said. "Actually the slump globally has been much worse than anything Japan had during that lost decade."
More stimulus money is key for a sustainable recovery as fears of inflation are overdone, Krugman said.