The Term Spread as a Predictor of Financial Instability
The term spread is the difference between interest rates on short- and long-dated government securities. It is often referred to as a predictor of the business cycle. In particular, inversions of the yield curve—a negative term spread—are considered an early warning sign. Such inversions typically receive a lot of attention in policy debates when they […]
Reading the Tea Leaves of the U.S. Business Cycle—Part Two
New work by Richard Crump, Domenico Giannone, and David Lucca finds labor market data to be the most reliable information for dating the U.S. business cycle.
Reading the Tea Leaves of the U.S. Business Cycle—Part One
Richard Crump, Domenico Giannone, and David Lucca discuss different conceptual approaches to dating the business cycle and study their past performance for the U.S. economy.