It seems like Wall Street is starting to get agitated about the possibility of yet another recession, both in the United States and on a global scale.
The talks of recession are primarily caused by slow global growth, which was one of the investing themes in 2015. Such growth sent both the S&P 500 and the MSCI World Index down by about 4 percent, according to The Saint Louis Business Journal.
The International Monetary Fund projections for the next two years expects the global economy, which is valued at $73.5 trillion, to grow 3.1 percent in 2015 and 3.6 percent in 2016. However, these numbers seem to be heading significantly lower.
Willem Buiter, an economist from Citigroup, states that the economy, both local and global, is performing substantially below its potential output. WIth this in mind, he believes that the chances of a global recession in 2016 are growing, reports CNBC News.
"We think that the evidence suggests that the global output gap is negative and that the global economy is currently growing at a rate below global potential growth. The negative output gap is therefore widening," he said.
"From an output gap that was probably quite close to zero fairly recently, continued sub-par global growth is likely to put the global economy back into recession, if indeed the world ever fully emerged of the recession caused by the global financial crisis."
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