The October global economic outlook

The October global economic outlook

From the IMF’s October Global Outlook:

The dangerous divergence in economic prospects across countries remains a major concern. Aggregate output for the advanced economy group is expected to regain its pre-pandemic trend path in 2022 and exceed it by 0.9 percent in 2024. By contrast, aggregate output for the emerging market and developing economy group (excluding China) is expected to remain 5.5 percent below the pre-pandemic forecast in 2024, resulting in a larger setback to improvements in their living standards.

These divergences are a consequence of the “great vaccine divide” and large disparities in policy support.

And from the Brookings TIGER index which tracks the global economy:

The latest update of the Brookings-Financial Times Tracking Indexes for the Global Economic Recovery (TIGER) shows growth momentum weakening across the world, particularly in the two major engines of global growth—the U.S. and China.

A Hobbled Recovery Along Entrenched Fault Lines
From: IMF
TIGER: Tracking Indexes for the Global Economic Recovery
Authors: Eswar Prasad, Aryan Khanna
From: Brookings

Analyzing the tails of predictive densities of macroeconomic variables – a new model

Clark et al. propose a multi-country, non-parametric quantile regression, which they then use to investigate growth at risk in a panel of 11 advanced economies. The choice of non-parametric method is based on findings from previous research which found that Bayesian Additive Regression Trees are particularly useful in crisis times when growth at risk issues are of particular importance.

In terms of empirical results, our proposed models commonly improve on the benchmark single country linear quantile model in recursive growth forecast comparisons, more so in the tails than near the center of the distribution.

Investigating Growth at Risk Using a Multi-country Non-parametric Quantile Factor Model
Authors: Todd E. Clark, Florian Huber, Gary Koop, , Massimiliano Marcellino, Michael Pfarrhofer
From: Federal Reserve Bank of Cleveland, University of Salzburg, University of Strathclyde, Bocconi University