If you’ve been following the latest financial news, it might look like the U.S.’s longest economic expansion ever is nearing its untimely end.
Markets are in turmoil, Global Central Banks cutting interest rates, and officials are rushing to contain the spread of a deadly coronavirus that’s already infected more than 100,000 people. The yield on the 10-year Treasury plunged to its lowest ever. Meanwhile, global firms are having to alter their supply chains as quarantines shut down factories.
Why predicting recessions is difficult
At the beginning of 2020, a rapidly spreading contagion wasn’t on anyone’s radar. As recession fears return to worry financial markets and everyday Americans alike, it casts a spotlight on just how complicated predicting downturns are — even for those who are trained to identify them.
A working research paper from March 2018 by economists at the International Monetary Fund (IMF) — Zidong An, Joao Tovar Jalles and…