We estimate a three-variate VAR using proxies of global financial uncertainty, the global financial cycle, and world … outbreak. We predict the cumulative loss in world output one year after the uncertainty shock due to Covid-19 to be about 14% …

the world output loss that materialized during the great recession would have been 13% lower in absence of GFU shocks. We … after GFU shocks, the larger the world output contraction is …