RECESSION PAIN INDEX, DETAILS
Dr Staffan Canback
Executive Chairman at ??????????????????. Streamlining corporate decision making.
This a companion piece to my post on the recession pain index. Included are all the countries in IMF's WEO dataset, not only the top 30.
For those have not seen the post:
I constructed a recession pain index, or PIX, for the global economy using data from the IMF's World Economic Outlook (April) dataset. PIX combines the decline in GDP growth ; the increase in unemployment, and the increase in government net debt (borrowing) in 2020 relative to 2019.
A high PIX means that a country is severely negatively impacted by the recession. A low PIX means that the country is relatively unaffected (but still affected).
I also created a regional index with PIX weighted by population. Emerging countries do relatively well and in this sense the current recession is similar to 2008-2009.
The strategic and resource allocation implications from the index are large for global companies.
Technically: Each variable was standardized with mean 0, and standard deviation 1. They were then equally weighted and scaled in the index so that max=100, min=0.
Source: IMF WEO April 2020 (https://www.imf.org/external/pubs/ft/weo/2020/01/weodata/index.aspx); Canback analysis