The reverberations of the Eurozone Crisis may substantially impact the United States economy, according to researchers at the Federal Reserve Bank of San Francisco. The group pegged the odds of a 2012 recession at over 50 percent.
The European sovereign debt crisis has aggravated international threats to the U.S. economy, the researchers, comprised of Travis J. Berge, Early Elias and Oscar Jorda, wrote.
The impact of the Japanese tsunami on the U.S. economy show the nation is still vulnerable to outside calamities.
The researchers suggest that while the U.S.'s standalone odds of a recession stand at 30 percent by the second half of 2012. The recession odds as a result of international factors peaks at 45 percent by the end of the year. Combined, the two put the U.S. at higher than 50 percent for a second dip in 2012.
The combination of these two recession coins [...] is quite disconcerting, the researchers wrote. Prudence suggests that the fragile state of the U.S. economy would not easily withstand turbulence coming across the Atlantic. A European sovereign debt default may well sink the United States back into recession. However, if we navigate the storm through the second half of 2012, it appears that danger will recede rapidly in 2013.