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Here's who would win and lose just about every economic scenario we can imagine

Published by Business Insider on Thu, 08 Sep 2016


There hasn't been a great deal going on in recent weeks.The global economy is humming along, and the wild market swings we've seen over the past 12 months have been notable by their absence.Still, there are risks on the horizon."Global growth is still seen as on track torecover gradually toward its underlying trend of 3-1/2% over the year ahead," Deutsche Bank said in a note. "Werecognize, however, that numerous potential unforeseen events could alter thispath."Ateam of Deutsche Bank economists led by Peter Hooper used a "vector autoregression" model to try and figure out how gross-domestic product in certain countries responds to various events.Here's what they found:A Fed rate hikeA 25 basis point rate hike would see the global real GDP level about 0.4 percentage points lower, with US real GDP falling by about 0.5 percentage points."The hits to real GDP in several other advanced economies, including theUK, Canada and Australia, are also significant, ranging from about 0.4 to 0.7percentage points over two years," the note said.A 10% increase in the oil price"Higher oil prices lead to the largest positiveboost to GDP primarily for oil exporting nations, including Mexico, Saudi Arabia,and Canada, while oil importing countries, including South Korea, Singapore, andIndonesia, suffer the largest reductions in real GDP over the next two years, onthe order of 0.25-0.50 percentage points of output," Deutsche Bank said in the note.A 6% drop in global equitiesA sharp sell off in the equity market "exerts a significant drag on world growth" in the period that follows, according to Deutsche Bank, with real GDP reduced by about 0.5 percentage points."The most significant drag is primarily felt by emerging market economies, whotend to be more sensitive to shifts in global risk sentiment, which can also havelarge adverse effects on capital flows and currency valuations," the note said. "Singapore, Mexico,Malaysia, Thailand and Korea all experience a decline in output of between 1 and2 percentage points."See the rest of the story at Business Insider
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