Implications Of Yield Curve Flattening For The UK

Professor of Public Affairs and Economics at the University of Wisconsin • Aug 14, 2019 at 2:24 PM EDT

The 10yr-3mo spread is not particularly informative regarding recessions (as defined by ECRI) or industrial production growth in the UK. It is informative regarding real-time GDP.

In today’s Bloomberg:

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In Chinn and Kucko (2015), we find that the 10yr-3mo spread is not particularly informative regarding recessions (as defined by ECRI) or industrial production growth in the UK. It is informative regarding real-time GDP, however (which is what we’ll see in the coming months regarding 2019-2020). We didn’t report the 10yr-2yr spread results.

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