Economists at Citigroup argue in a new report that a global recession is now “the most likely outcome” over the next two years.
What exactly do they mean by a global recession?
They point out:
We use the only definition of a recession we know that makes sense when it is used consistently. As stated earlier, we define a recession as a period during which the actual unemployment rate is above the natural unemployment rate or Nairu, or during which there is a negative output gap: the level of actual real GDP is below the level of potential real GDP.
To avoid excessive attention to mini-recessions, the period of excess capacity should have a duration of a year or longer.
Read it all.
(FT) Is a global recession coming?
Economists at Citigroup argue in a new report that a global recession is now “the most likely outcome” over the next two years.
What exactly do they mean by a global recession?
They point out:
We use the only definition of a recession we know that makes sense when it is used consistently. As stated earlier, we define a recession as a period during which the actual unemployment rate is above the natural unemployment rate or Nairu, or during which there is a negative output gap: the level of actual real GDP is below the level of potential real GDP.
To avoid excessive attention to mini-recessions, the period of excess capacity should have a duration of a year or longer.
Read it all.