A global recession is a period of economic decline that is synchronized across many economies. A global downturn is more pronounced than a recession that only involves the economy of one country because trade relations and international financial systems transmit economic shocks from one economy to others. A global recession is a common phenomenon, occurring five times since 1950 and overlapping with the 2008 global financial crisis.
While the world’s largest economies tend to have more influence over the global economy, a global downturn is often felt throughout the region because large trading partners have close links with each other and can quickly experience adverse economic effects when the economy of one country begins to slow down. Globally synchronized economic downturns have occurred several times in the past 40 years, with each episode coinciding with the United States’ own recession and often triggered by the same factors: oil shocks, tightening monetary policies in advanced countries, debt crises in the European Union and the former USSR, and the transition to market economies in emerging markets.
The MM Global Recession Probability indicator indicates the probability that the global economy will go into recession in any given month based on various economic indicators, including consumption, employment, manufacturing, finance and raw materials. The indicator is compiled by MacroMicro and reflects the view of its economic researchers. It is based on the assumption that a growing recession probability indicates an increased risk of slowing growth in all major economies, including the US economy, although the extent to which the US economy is affected depends on other factors.
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