The Term Spread As Recession Predictor, Post-2024
Original Report
Using a plain vanilla term spread model (spread, short rate), what remains? From notes for tomorrow’s lecture. Figure 1: Estimated recession probabilities from probit on 10yr-3mo term spread, short...
Using a plain vanilla term spread model (spread, short rate), what remains? From notes for tomorrow’s lecture. Figure 1: Estimated recession probabilities from probit on 10yr-3mo term spread, short rate over 1960-2018 (brown), over full sample (black). Red dashed line at 33%. NBER defined peak-to-trough recession dates shaded gray. Source: author’s calculations, NBER. Using a […]
Glass House Analysis
This story reflects the interconnected nature of modern economic systems, where developments in one sector inevitably affect others. Understanding these connections is essential for grasping how policy decisions and market movements translate into real-world outcomes for families, workers, and communities. The economy is not an abstract system of numbers—it's the sum total of decisions about who works, who prospers, and who struggles.
The implications extend beyond the immediate news cycle. Every economic development creates ripples that affect employment, prices, and opportunities in ways that may not be immediately visible but are deeply felt. By tracking these connections, we can better understand how the economy truly works—not as an abstract machine, but as a human system shaped by and shaping the lives of millions.
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