RECESION GLOBAL

The Great Recession Goes Global

Menzie Chinn | Apr 28, 2009

One of the most interesting "boxes" in the IMF's World Economic Outlook (in Chapter 1) is the one entitled, somewhat innocuously "Global Business Cycles", by Marco Terrones, Ayhan Kose and Prakash Loungani at the IMF. Yet, it's important to read until the ending paragraph:

To summarize, the 2009 forecasts of economic activity, if realized, would qualify this year as the most severe global recession during the postwar period. Most indicators are expected to register sharper declines than in previous episodes of global recession. In addition to its severity, this global recession also qualifies as the most synchronized, as virtually all the advanced economies and many emerging and developing economies are in recession.

The authors are to be commended for simultaneously analyzing the data for numerous countries (not easy, as anybody who's tried this knows!) and applying a systematic procedure for dating the troughs and peaks.From my perspective, the graphs easily summarize the main points.Excerpt from Figure in Box: "Global Business Cycles," IMF WEO April 2009.

Excerpt from Figure in Box: "Global Business Cycles," IMF WEO April 2009.

Excerpt from Figure in Box: "Global Business Cycles," IMF WEO April 2009.Related to these indicators related in the Box is the IMF's view of the world output gap. As Econbrowser readers know, I think the output gap is another important indicator -- despite the imprecision associated with such estimates -- of economic distress. Here's the relevant graph:

Excerpt from Figure 1.9 from IMF World Economic Outlook, April 2009.

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Originally published at Econbrowser and reproduced here with the author’s permission.