This paper contributes to the literature on the properties of money and credit indicators for detecting asset price misalignments. After a review of the evidence in the literature on this issue, the paper discusses the approaches that can be considered to detect asset price busts. Considering a...

Many applied settings in empirical economics require estimation of a large number of fixed effects, like teacher effects or location effects. In the context of binary response variables, previous studies have been limited to the linear probability model, citing perfect prediction and incidental...

In this paper, we replicate the main results of Rudebusch and Williams (2009), who show that the use of the yield spread in a probit model can predict recessions better than the Survey of Professional Forecasters. We investigate the robustness of their results in several ways: extending the...

Extending earlier research on forecasting recessions with financial variables, I examine the importance of additional financial variables and temporal dependence for recession prediction. I show that both additional financial variables, in particular, the Treasury bill spread, default yield...