Although it is premature to claim that a worldwide recession is around the corner, the breakdown of global trade and elevated policy uncertainty will undoubtedly suppress growth in the months ahead. Each country will need to prepare for the worst by conserving whatever economic-policy space it has.
ITHACA – The timing could hardly have been less propitious. Just as the world economy was showing signs of stabilizing, the odds of a policy-induced global recession have risen significantly. The latest update to the Brookings-FT Tiger (Tracking Indexes for the Global Economic Recovery) index reveals a mixed picture, with the financial index declining and private-sector confidence crumbling even as macroeconomic data (which lag the other indicators) suggest a more benign scenario.
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