The Repository @ St. Cloud State

Open Access Knowledge and Scholarship

Date of Award


Culminating Project Type

Starred Paper



Degree Name

Applied Economics: M.S.




School of Public Affairs

First Advisor

Zhengyang ‘Robin’ Chen

Second Advisor

Kenneth Rebeck

Third Advisor

Mana Komai-Molle

Creative Commons License

Creative Commons License
This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 4.0 License.


Bonds spread has been recognized as a strong indicator of future economic growth. Forecasting economic growth with spread is simpler compared to other measures. This paper focuses to study the usefulness of the spread between Treasury Bonds and High-Quality Corporate Bonds in predicting US economic growth, its accuracy between the years 1999 and 2021, and comparison with the traditional yield curve. By analyzing the relationship between different spreads and Industrial production index frequently used for observing and analyzing current economic performance, the results indicate that the traditional spreads such as 10Year–3Month and 10Year–2Year are not very accurate predictors of economic activity, while the new spread between Treasury Bonds and High-Quality Corporate Bonds can predict the economy.

Keywords: Spread, Industrial Production, Economic Growth, Yield Curve.