Economist and Nobel Prize for Economics winner Robert Engle spoke with Fox Business Network’s (FBN) Liz Claman about the volatility in the markets, specifically last week’s major markets fall. Engle believed that German Chancellor Angela Merkel’s “not willing to stimulate,” their economy was the cause of the fall. Engle further commented that the top issue facing the global economy is the weakness in Europe, and that “domestically I think we have to worry about the housing market.” On the mid-term elections, Engle said, “we’re heading for more political deadlock,” and, “the government is unable to mobilize itself.”

Robert Engle: Germany's "Unwillingness To Stimulate Its Economy" Caused Market Crash

Robert Engle on Germany’s unwillingness to stimulate the economy causing the US markets to crash last week:

“There’s uncertainty about the future and then a news event comes along and it moves the markets.  The thing that I thought was the new piece of information was that Europe looked worse than it had. Germany was slowing down, and Angela Merkel said that we better tightened our belts, which I think the market’s felt was just the wrong answer. The fact that Germany was not willing to stimulate its economy at a time when they’re facing the Russian sanctions both directions, when there are other slowdowns in the market, made it look like this risk was much higher.”

Robert Engle on the number one worry being weakness in Europe:

“That’s my number one.”

Robert Engle on his second worry for the market:

“Domestically I think we have to worry about the housing market. The housing market had a recovery, it slowed down, it’s kind of stopped, and I think one of things that will really help it is this potential reform that is being done to liberalize the financing arrangements for housing.”

Robert Engle on the mid-term elections:

“We’re heading for more political deadlock. It certainly makes it hard to solve problems, I mean the government is unable to mobilize itself to combat Ebola for example. It’s unable to mobilize itself to do something about the housing market; it’s unable to do other things.”