What Did the German Term Spread Predict for 2024?
Original Report
The 10yr-3mo German spread, hitherto a pretty good predictor, inverted at 2022M12. Hitherto a pretty good predictor of German recessions (as labelled by ECRI), the implied probability was 70%, using...
The 10yr-3mo German spread, hitherto a pretty good predictor, inverted at 2022M12. Hitherto a pretty good predictor of German recessions (as labelled by ECRI), the implied probability was 70%, using a plain vanilla spread regression. From Chinn and Ferrara (2026), here are estimated probabilities for a probit regression, estimated up to 2019M12 (black line in […]
Glass House Analysis
This story reflects the interconnected nature of modern economic systems, where developments in one sector inevitably affect others. Understanding these connections is essential for grasping how policy decisions and market movements translate into real-world outcomes for families, workers, and communities. The economy is not an abstract system of numbers—it's the sum total of decisions about who works, who prospers, and who struggles.
The implications extend beyond the immediate news cycle. Every economic development creates ripples that affect employment, prices, and opportunities in ways that may not be immediately visible but are deeply felt. By tracking these connections, we can better understand how the economy truly works—not as an abstract machine, but as a human system shaped by and shaping the lives of millions.
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