In this paper we account for the U.S. Fed's response to money demand shocks by allowing for less-than-complete accommodation in the estimation of its money supply policy rule. We estimate a significantly lower degree of money accommodation in the 1979-1982 period than before and after. We...

We examine how the predictive power of term spreads as predictors of economic recessions in Europe and the US has changed in the last two decades. In particular, we focus on the power of domestic and of US and German term spreads to predict real economic activity. Using a battery of...