IMF has just released excellent (as always) World Economic Outlook. You can find a chapter on inflation here and on financial distress and recessions here .

The main conclusions are (briefly) as follows:

  • Inflation risks remain elevated, especially in EM, policy failure to address this risk may worsen inflation output trade-off in the future
  • Banking sector crises tend to produce recessions. They are deeper when households are highly leveraged, when prior to shock housing prices were going sharply up and with growing arms-length financing. Conclusions: US is facing recession, Europe will do better. Another conclusion: recapitalize banks and avoid moral hazard. I wish Mr Paulson and Senate read WEO before they did what they did.