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Predicting Regional Recessions Via the Yield Spread

Author

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  • Gauger, Jean

    (The University of Tennessee, Knoxville)

  • Schunk, Don

    (University of South Carolina)

Abstract

This paper examines the ability of the slope of the yield curve to serve as a predictor of regional recessions. The ability of interest rate spreads to predict recessions has received considerable attention at the aggregate level. This paper offers evidence on the usefulness of rate spreads in predicting economic downturns at the regional level. The evidence points to regional differences in the ability of the U.S. yield curve to predict regional recessions. These differences are highlighted in the context of differing regional economic structures.

Suggested Citation

  • Gauger, Jean & Schunk, Don, 2002. "Predicting Regional Recessions Via the Yield Spread," The Review of Regional Studies, Southern Regional Science Association, vol. 32(2), pages 151-170, Summer/Fa.
    • Handle: RePEc:rre:publsh:v:32:y:2002:i:2:p:151-170
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    References listed on IDEAS

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    5. Gerald A. Carlino & Robert H. DeFina, 1997. "The differential regional effects of monetary policy: evidence from the U.S. States," Working Papers 97-12, Federal Reserve Bank of Philadelphia.
    6. Estrella, Arturo & Hardouvelis, Gikas A, 1991. "The Term Structure as a Predictor of Real Economic Activity," Journal of Finance, American Finance Association, vol. 46(2), pages 555-576, June.
    7. Gerald Carlino & Robert Defina, 1998. "The Differential Regional Effects Of Monetary Policy," The Review of Economics and Statistics, MIT Press, vol. 80(4), pages 572-587, November.
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