SCHR - Using The Yield Curve As A Recession Indicator
I expect that I will discuss probit recession models further in later articles, but I first want to have a long detour to discuss the use of the yield curve as an input to those models. It is not surprising that the yield curve has worked as a recession indicator, but we need to be cautious about it - particularly if one is a bond market participant.
(Due to some technical difficulties, I was unable to get some charts done for this article. As a result, I am missing some background information, such as the