The Yield Curve versus the Corporate Spread: An Evaluation of the Predictive Nature of BothMeckes, Amy Aileenyield curvecorporate spreadEconomicsB SThis paper compares the relationship between the slope of the yield curve and a number of economic variables that include unemployment, stock prices, gold, industrial production and inflation to the relationship between the corporate spread and the same variables. Empirical results, using vector autoregressions and impulse response functions, conclude that the corporate spread contains useful predictive information. However, the yield curve acts in response to Federal Reserve Bank actions and reactions. I conclude that due to the great moderation and the glut of savings, the corporate bond spread is a more accurate forecaster of future economic climates than the more traditionally scrutinized yield curve slope.Dr. Russell Paul Chuderewicz, Thesis SupervisorDr. Russell Paul Chuderewicz, Thesis SupervisorDavid Shapiro, Thesis Honors Advisoropen_access2010-04-28T05:42:37Zhttps://honors.libraries.psu.edu/catalog/1143