Hossein S. Kazemi and Eloi Traroe
Using spreads between short and long-term Treasury bonds yields this paper examines the effectiveness of the role of changing spreads as a predictor of economic fluctuations. The reliability of the yield curve and other indicators of economic forecasting in more recent years have undergone a great deal of scrutiny and questioning. This paper examines different economic and financial indicators used to forecast business fluctuations and tests the usefulness and their accuracy in achieving their desired goal in the more recent economic conditions. Taking the pre and post recession periods of the past few economic downturns, the usefulness of Leading Economic Indicators (LEI) and Yield Curve (YC) as predictors of economic activity are examined.