(Bloomberg News) Nobel Prize-winning economist Joseph Stiglitz said the Federal Reserve's policy of cutting interest rates to a record low has had repercussions worldwide, including currency misalignments and the risk of asset price bubbles.

"Fed policy was supposed to reignite the American economy, but it's not doing that," Stiglitz, a professor at Columbia University in New York since 2001, said in a Bloomberg Television interview today. "The flood of liquidity is going abroad and causing problems all over the world."

Japan sold the yen last month for the first time in six years to spur exports and economic growth, joining countries across Asia and Latin America that have sought to temper gains in their currencies against the dollar. Tensions over exchange rate policies prompted Brazil's Finance Minister Guido Mantega to warn Sept. 27 of a "currency war."

"The worry is that the flood of liquidity is going to cause what is sometimes being referred to as an emerging-market bubble," Stiglitz said. "Money is going in, and the worry is it will cause a real estate bubble in one developing country or another."

The dollar fell to a 15-year low against the yen today after a private report showed U.S. companies unexpectedly cut jobs last month, fueling speculation the Fed will buy assets to spur a slowing economy.

The dollar declined 0.4 percent to 82.90 yen at 10:07 a.m. in New York, from 83.22 yesterday. It touched 82.77, the weakest level since May 1995 and less than the low of 82.88 on Sept. 15, when Japan sold yen to weaken its value.

Trade Deficit

China's currency, the yuan, "is misaligned and there needs to be an adjustment," Stiglitz said. "But we should understand that that will not solve the problem of America's trade deficit."

An expansion of the Fed's balance sheet, now under consideration by central bank policy makers, would provide only slight stimulus to the U.S. economy, Stiglitz said.

Such a move "might help a little bit in the U.S., causing a lot of problems around the world and not actually addressing the fundamental problems here at home," he said.

The Fed cut its benchmark interest rate almost to zero at the height of the financial crisis in December 2008 and turned to asset purchases to bring down long-term borrowing costs.