Various economists and investment banks have "probability of recession" models. Most of these are saying 10% to 20% chance of a recession, a few are saying >50% chance.
The thing is, if you look at a chart of the "recession probability" from these models, superimposed on actual recessions, you see that when the models give a recession probability over a certain, seemingly low, level - like 10-20% - then 8 times out of 10, there is in fact a recession in the following year.
In other words, when the model says recession probability is near-zero, the real odds of an imminent recession really are near-zero, but then it turns non-linear - once the models say 10% or 20%, the real odds are more like 80%.
Quote:
Originally Posted by tabs
Mother doesn't know if the US will go into Recession. She thinks it maybe a close run thing.
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