Real‐time weakness of the global economy

We propose an empirical framework to measure the real‐time weakness of the global economy. This framework relies on nonlinear factor models to identify recessionary and expansionary episodes, fitted to several macroeconomic variables, for the largest advanced and emerging economies. The country‐specific inferences are then combined to construct both a Global Weakness Index and a Global Intensity Index. As new economic data become available from different regions, this information is continually updated to provide high‐frequency, real‐time insights into (i) the strength of the global economy, (ii) the economic regions supporting this strength, (iii) country‐specific and global risk assessments, and (iv) the intensity of recessionary and expansionary episodes.