{"id":277982,"date":"2025-06-07T07:30:39","date_gmt":"2025-06-07T07:30:39","guid":{"rendered":"https:\/\/michigandigitalnews.com\/index.php\/2025\/06\/07\/michaillat-saez-recession-indicator-econbrowser\/"},"modified":"2025-06-25T17:08:10","modified_gmt":"2025-06-25T17:08:10","slug":"michaillat-saez-recession-indicator-econbrowser","status":"publish","type":"post","link":"https:\/\/michigandigitalnews.com\/index.php\/2025\/06\/07\/michaillat-saez-recession-indicator-econbrowser\/","title":{"rendered":"Michaillat-Saez Recession Indicator | Econbrowser"},"content":{"rendered":"<p> [ad_1]<br \/>\n<\/p>\n<div id=\"post-56901\">\n\t\t\t\t<!-- .entry-header --><\/p>\n<div class=\"entry-content\">\n<p><span data-olk-copy-source=\"MessageBody\">As noted in this <a href=\"https:\/\/econbrowser.com\/archives\/2024\/08\/already-in-recession\">post<\/a>, the indicator detected a recession in March 2024, stayed above the threshold thereafter, so the implication is that we are currently the same recession. However, since then, the indicator has decreased substantially, so the recession probability is low.<\/span><\/p>\n<p><a href=\"https:\/\/econbrowser.com\/wp-content\/uploads\/2025\/06\/recession_indicator_6jun25.png\"><img fetchpriority=\"high\" fetchpriority=\"high\" decoding=\"async\" class=\"alignnone size-full wp-image-56902\" src=\"https:\/\/econbrowser.com\/wp-content\/uploads\/2025\/06\/recession_indicator_6jun25.png\" alt=\"\" width=\"1200\" height=\"900\" srcset=\"https:\/\/econbrowser.com\/wp-content\/uploads\/2025\/06\/recession_indicator_6jun25.png 1200w, https:\/\/econbrowser.com\/wp-content\/uploads\/2025\/06\/recession_indicator_6jun25-300x225.png 300w, https:\/\/econbrowser.com\/wp-content\/uploads\/2025\/06\/recession_indicator_6jun25-1024x768.png 1024w, https:\/\/econbrowser.com\/wp-content\/uploads\/2025\/06\/recession_indicator_6jun25-768x576.png 768w, https:\/\/econbrowser.com\/wp-content\/uploads\/2025\/06\/recession_indicator_6jun25-624x468.png 624w\" sizes=\"(max-width: 1200px) 100vw, 1200px\"\/><\/a> <a href=\"https:\/\/econbrowser.com\/wp-content\/uploads\/2025\/06\/recession_probability_6jun25-1.png\"><img decoding=\"async\" class=\"alignnone size-full wp-image-56904\" src=\"https:\/\/econbrowser.com\/wp-content\/uploads\/2025\/06\/recession_probability_6jun25-1.png\" alt=\"\" width=\"1200\" height=\"900\" srcset=\"https:\/\/econbrowser.com\/wp-content\/uploads\/2025\/06\/recession_probability_6jun25-1.png 1200w, https:\/\/econbrowser.com\/wp-content\/uploads\/2025\/06\/recession_probability_6jun25-1-300x225.png 300w, https:\/\/econbrowser.com\/wp-content\/uploads\/2025\/06\/recession_probability_6jun25-1-1024x768.png 1024w, https:\/\/econbrowser.com\/wp-content\/uploads\/2025\/06\/recession_probability_6jun25-1-768x576.png 768w, https:\/\/econbrowser.com\/wp-content\/uploads\/2025\/06\/recession_probability_6jun25-1-624x468.png 624w\" sizes=\"(max-width: 1200px) 100vw, 1200px\"\/><\/a><\/p>\n<p>From the website:<\/p>\n<blockquote>\n<ul>\n<li>The recession probability is computed from the dual-threshold extension of the Michez rule. The recession probability is the fraction of the 0.29pp\u20130.81pp band that the recession indicator has covered:\u00a0<span class=\"katex\"><span class=\"katex-mathml\"><math xmlns=\"http:\/\/www.w3.org\/1998\/Math\/MathML\"><semantics><mrow><mi>p<\/mi><mo>=<\/mo><\/mrow><\/semantics><\/math><\/span><span class=\"katex-html\" aria-hidden=\"true\"><span class=\"base\"><span class=\"mord mathnormal\">p<\/span><span class=\"mrel\">=<\/span><\/span><\/span><\/span>\u00a0(indicator\u00a0<span class=\"katex\"><span class=\"katex-mathml\"><math xmlns=\"http:\/\/www.w3.org\/1998\/Math\/MathML\"><semantics><mrow><mo>\u2212<\/mo><\/mrow><\/semantics><\/math><\/span><span class=\"katex-html\" aria-hidden=\"true\"><span class=\"base\"><span class=\"mord\">\u2212<\/span><\/span><\/span><\/span>\u00a00.29)\u00a0<span class=\"katex\"><span class=\"katex-mathml\"><math xmlns=\"http:\/\/www.w3.org\/1998\/Math\/MathML\"><semantics><mrow><mi mathvariant=\"normal\">\/<\/mi><\/mrow><\/semantics><\/math><\/span><span class=\"katex-html\" aria-hidden=\"true\"><span class=\"base\"><span class=\"mord\">\/<\/span><\/span><\/span><\/span>\u00a0(0.81\u00a0<span class=\"katex\"><span class=\"katex-mathml\"><math xmlns=\"http:\/\/www.w3.org\/1998\/Math\/MathML\"><semantics><mrow><mo>\u2212<\/mo><\/mrow><\/semantics><\/math><\/span><span class=\"katex-html\" aria-hidden=\"true\"><span class=\"base\"><span class=\"mord\">\u2212<\/span><\/span><\/span><\/span>\u00a00.29).<\/li>\n<li><em>Interpretation:<\/em>\u00a0The dual-threshold Michez rule works as follows: values of the indicator between 0.29pp and 0.81pp signal a probable recession; values above 0.81pp signal a certain recession. This dual-threshold extension accounts for uncertainty in the true recession threshold and provides a simple way to nowcast recession risk.<\/li>\n<\/ul>\n<\/blockquote>\n<p>The indicator and probability estimates are now reported on an <a href=\"https:\/\/pascalmichaillat.org\/dashboard\/\">automated dashboard<\/a> maintained by the authors.<\/p>\n<p>\u00a0<\/p>\n<\/p><\/div>\n<p><!-- .entry-content --><\/p>\n<footer class=\"entry-meta\">\n\t\t\tThis entry was posted on <a href=\"https:\/\/econbrowser.com\/archives\/2025\/06\/michaillat-saez-recession-indicator\" title=\"11:26 pm\" rel=\"bookmark\"><time class=\"entry-date\" datetime=\"2025-06-06T23:26:08-07:00\">June 6, 2025<\/time><\/a><span class=\"by-author\"> by <span class=\"author vcard\"><a class=\"url fn n\" href=\"https:\/\/econbrowser.com\/archives\/author\/menzie_chinn\" title=\"View all posts by Menzie Chinn\" rel=\"author\">Menzie Chinn<\/a><\/span><\/span>.\t\t\t\t\t\t\t\t<\/footer>\n<p><!-- .entry-meta -->\n\t<\/div>\n<p>[ad_2]<br \/>\n<br \/><a href=\"https:\/\/econbrowser.com\/archives\/2025\/06\/michaillat-saez-recession-indicator\">Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>[ad_1] As noted in this post, the indicator detected a recession in March 2024, stayed above the threshold thereafter, so the implication is that we<\/p>\n","protected":false},"author":1,"featured_media":277983,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"_uf_show_specific_survey":0,"_uf_disable_surveys":false,"footnotes":""},"categories":[155],"tags":[],"_links":{"self":[{"href":"https:\/\/michigandigitalnews.com\/index.php\/wp-json\/wp\/v2\/posts\/277982"}],"collection":[{"href":"https:\/\/michigandigitalnews.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/michigandigitalnews.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/michigandigitalnews.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/michigandigitalnews.com\/index.php\/wp-json\/wp\/v2\/comments?post=277982"}],"version-history":[{"count":0,"href":"https:\/\/michigandigitalnews.com\/index.php\/wp-json\/wp\/v2\/posts\/277982\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/michigandigitalnews.com\/index.php\/wp-json\/wp\/v2\/media\/277983"}],"wp:attachment":[{"href":"https:\/\/michigandigitalnews.com\/index.php\/wp-json\/wp\/v2\/media?parent=277982"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/michigandigitalnews.com\/index.php\/wp-json\/wp\/v2\/categories?post=277982"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/michigandigitalnews.com\/index.php\/wp-json\/wp\/v2\/tags?post=277982"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}