EconPapers    
Economics at your fingertips  
 

Is a Global Recession Imminent?

Guénette, Justin Damien, Ayhan Kose and Naotaka Sugawara
Authors registered in the RePEc Author Service: Justin-Damien Guenette

No 17566, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: Global growth prospects have deteriorated significantly since the beginning of the year, raising the specter of global recession. This paper relies on insights gleaned from previous global recessions to analyze the recent evolution of economic activity and policies and presents plausible scenarios for the global economy in 2022–24. We report three major findings. First, every global recession since 1970 was preceded by a significant weakening of global growth in the previous year, as has happened recently. Second, the global economy is in the midst of one of the most internationally synchronous episodes of monetary and fiscal policy tightening of the past five decades. The policy actions in many countries are necessary to contain inflationary pressures, but their mutually compounding effects could have larger impacts than envisioned—both in tightening financial conditions and in steepening the global growth slowdown. Third, if the degree of global monetary policy tightening markets now expect is not enough to reduce inflation to targets, experience from previous global recessions suggests that the additional tightening needed could cause significant financial stress and increase the likelihood of a global recession next year. These findings imply that policymakers need to carefully calibrate, clearly communicate, and credibly implement their policy actions while considering potential international spillovers, especially given the globally synchronous withdrawal of monetary and fiscal policies. They also need to pursue supply-side measures to overcome constraints confronting labor markets, energy markets, and trade networks.

Keywords: Monetary policy; Fiscal policy; Global inflation; Global economy; Growth Scenarios (search for similar items in EconPapers)
JEL-codes: E17 E32 E37 E58 F44 G01 (search for similar items in EconPapers)
Date: 2022-10
References: Add references at CitEc
Citations:

Downloads: (external link)
https://cepr.org/publications/DP17566 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

Related works:
Working Paper: Is a Global Recession Imminent? (2022) Downloads
Working Paper: Is a Global Recession Imminent? (2022) Downloads
Working Paper: Is a Global Recession Imminent? (2022) Downloads
Working Paper: Is a Global Recession Imminent? (2022) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:17566

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP17566

Access Statistics for this paper

More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().

 
Page updated 2025-03-23
Handle: RePEc:cpr:ceprdp:17566