Tuesday, March 31, 2009

Comparison: OECD and "More Adverse" Scenarios

by Calculated Risk on 3/31/2009 06:50:00 PM

The Organisation for Economic Co-operation and Development (OECD) released an Interim Economic Outlook today. I thought it would be interesting to compare their forecast with the "more adverse" scenario from the Stress Test.

Stress Test and OECD GDP Forecasts Click on graph for larger image in new window.

The first graph compares the quarterly OECD U.S. GDP forecast with the quarterly stress test scenario (more adverse).

Clearly the OECD is more pessimistic than the more severe stress test scenario for the U.S. banks.

Stress Test and OECD Unemployment Rate ForecastsThe second graph compares the OECD unemployment rate forecast with the more severe scenario.

Once again, the OECD is slightly more pessimistic.

Earlier I compared both the baseline stress test scenario and the more adverse scenario with forecasts from Northern Trust and Goldman Sachs. At this point I think we can just ignore the old baseline scenario.

The "more adverse" scenario is the new baseline.