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Jul 01 2013

Assessing Global Recession Probabilities

In the wake of the Global Financial Crisis, central banks around the world have employed unconventional measures like quantitative easing (QE), which, they hope, will boost growth. But, despite massive QE injections, many major economies have repeatedly fallen into recession. This is hardly surprising in the context of “the yo-yo years” thesis, first presented by ECRI four years ago, which predicted more frequent recessions as a result of declining trend growth and rising cycle volatility.

ECRI has just completed an updated analysis of recession probabilities for the 21 economies for which we have determined business and growth rate cycle chronologies. Our analysis describes how often these developed and developing economies are likely to see cyclical slowdowns turn into recessions in the coming years.