Using data including the most recent recession and employing two different definitions of recessions, this article examines the ability of the term spread of interest rates to predict recessions for seven countries. The empirical results indicate that the predictive power of the term spread is...

We emphasize the importance of properly identifying the long-run relations underlying the monetary model of the exchange rate. The separate estimation of long-run money demands leads to a "structural" error correction equation which allows an interpretation of the various channels affecting the...