Economic resilience: A new set of vulnerability indicators for OECD countries

Abstract

Complete document available on OLIS in its original format This document and any map included herein are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area. ECO/WKP(2015)67 Unclassified English-Or. English ECO/WKP(2015)67 2 OECD Working Papers should not be reported as representing the official views of the OECD or of its member countries. The opinions expressed and arguments employed are those of the author(s). Working Papers describe preliminary results or research in progress by the author(s) and are published to stimulate discussion on a broad range of issues on which the OECD works. Comments on Working Papers are welcomed, and may be sent to the Economics Department, OECD,

A multicriterial analysis of national competitiveness: Evidences for a resilient economy

“…To help governments to detect vulnerabilities early, Röhn, O. et al (2015) proposed a set of vulnerability indicators grouped into six areas: financial sector, non-financial sector, asset market, public sector, external sector, and international spillovers, contagion and global risks.…”

The Use of Models in Producing OECD Macroeconomic Forecasts

“…Other international organisations, such as the IMF, have gone further in publishing forecast ranges, fan charts and assessments of the likelihood of the occurrence of particular events, such as recession or deflation. The OECD has also recently been carrying out work to evaluate the usefulness of early warning indicators which can signal the probability of an imminent severe recession or crisis [Hermansen and Röhn (2015); Röhn et al (2015)], although this has not yet been incorporated as part of the regular commentary around the central forecast. Such developments, which explicitly recognise the inevitable uncertainty around global macroeconomic forecasts, appear particularly appropriate given the paucity of the forecast track-record beyond the current year, especially in predicting downturns.…”

Advance Warning Indicators of Past Severe GDP per Capita Recessions in Turkey

“…In order to do so, the paper draws heavily on recent OECD work of the Resilience workstream of the Economics Department. Röhn et al (2015) establish a database of more than 70 vulnerability indicators that are identified as particularly relevant for OECD countries based on a thorough review of the most recent evidence from the early warning literature and lessons learned from the global financial crisis. The indicators are grouped into five areas of domestic vulnerabilities: i) financial sector imbalances, ii) non-financial sector imbalances, iii) asset market imbalances, iv) public sector imbalances, v) external sector imbalances.…”

“…Hermansen and Röhn (2015) provide empirical evidence on the usefulness of these vulnerability indicators in predicting severe GDP per capita recessions and crises in OECD countries. In this paper we draw on the new database of Röhn et al (2015) and apply the same methodology as in Hermansen and Röhn (2015). In particular, we employ the signalling approach, a commonly used methodology, to detect vulnerability indicators that could perform particularly well in the Turkish context.…”

“…The starting point is a set of indicators of potential macroeconomic and financial vulnerabilities that have been identified in recent OECD ECO work (Röhn et al, 2015), based on a review of the most recent early warning literature and lessons learned from the global financial crisis. 2 The indicators are classified into five types of domestic vulnerabilities (or "imbalances"): i) financial sector imbalances, ii) non-financial sector imbalances, iii) asset market imbalances, iv) public sector imbalances and v) external sector imbalances.…”