The coronavirus outbreak is a "different kind of crisis" - Nobel laureate Joseph Stiglitz

CNBC reports that aggressive policy action by the Federal Reserve is "obviously not" enough to help the U.S. avert a downturn caused by the coronavirus outbreak, said Joseph Stiglitz, a Nobel laureate in economics.

"Given the nature of the uncertainties, given the nature of the collapsing incomes of so many people, it can help stabilize financial markets at best and it's clear that it didn't do that," Stiglitz told CNBC.

On Sunday, the Fed slashed interest rates to near-zero and announced a $750 billion asset-purchasing program to shelter the economy from the impact of the virus. Despite that, the markets crashed Monday - with the Dow suffering its worst day since the "Black Monday" market crash in 1987 and its third-worst day ever.

While the situation might have been worse without the Fed's moves, "clearly it didn't stabilize the stock markets," said Stiglitz, who is a former chief economist at the World Bank.

The problem is that "this is a different kind of crisis than normal crises. It's just not a problem of aggregate demand," he said.

"Because of the disease, people are shutting down their businesses. In the United States, restaurants in New York City have been closed," said Stiglitz. "More demand is not going to save that particular problem."