Here's who would win and lose just about every economic scenario we can imagine
REUTERS/Amr Abdallah Dalsh
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 to recover gradually toward its underlying trend of 3-1/2% over the year ahead," Deutsche Bank said in a note. "We recognize, however, that numerous potential unforeseen events could alter this path."
A team 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 hike
Deutsche BankA 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 the UK, Canada and Australia, are also significant, ranging from about 0.4 to 0.7 percentage points over two years," the note said.
A 10% increase in the oil price
Deutsche Bank"Higher oil prices lead to the largest positive boost to GDP primarily for oil exporting nations, including Mexico, Saudi Arabia, and Canada, while oil importing countries, including South Korea, Singapore, and Indonesia, suffer the largest reductions in real GDP over the next two years, on the order of 0.25-0.50 percentage points of output," Deutsche Bank said in the note.
A 6% drop in global equities
Deutsche BankA 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, who tend to be more sensitive to shifts in global risk sentiment, which can also have large 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 and 2 percentage points."
See the rest of the story at Business Insider