Yield Spread as a Leading Indicator of Real Economic Activity-- An Empirical Exercise on the Indian Economy

Author/Editor: Kanagasabapathy, K. ; Goyal, Rajan
Publication Date: May 01, 2002
Summary: There is growing evidence that the yield spread could serve as a leading indicator of real economic activity. This paper is an attempt to test this hypothesis for the Indian economy by relating movements in the yield spread in the government securities market to movements in the index of industrial production. The results show that yield spread could, inter alia, be considered as a leading indicator of industrial activity in India.
Subject(s): Market interest rates | India | Industrial production | Capital markets | Bonds

Author's Keyword(s): Yield curve | yield spread | lead indicators
Publication Date: May 01, 2002
ISBN/ISSN: 1934-7073 Format: Paper
Stock No: WPIEA0912002 Pages: 20
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