70% Chance of Recession in Next 6 Months

February 13, 2020

There’s a 70% chance of recession in the next six months.

Questions

1. Why do MIT Sloan School of Management and State Street Associate researchers think there is a 70 percent chance of recession in the next six months?
2. What is a recession?
3. Describe the output gap when the economy experiences a recession.
4. What policies can the government implement to move the economy out of a recession? What happens if these policies are implemented when the economy is at full employment?
5. Draw a graph to illustrate your answer to #4.