The Jerome Levy Forecasting Center has generated media attention recently with a new forecast of a 65% probability of a global recession next year, a contraction that will lead to a US downturn by the end of 2015. “Clearly the direction of most of the recent global economic news suggests movement toward a 2015 downturn,” the center’s chairman advised on Oct. 23 via Bloomberg. The reasoning is that balance-sheet excesses in the developed world threaten to drum up another financial crisis—a crisis that central banks will be hard-pressed to address because monetary stimulus is already in high gear and so there’s minimal capacity for juicing the economy with new liquidity.
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