Credit spreads’ limited use as short-term predictors – paper

The Bank of Estonia

A working paper published by the Bank of Estonia examines the accuracy of several measures of credit in predicting short-term changes in the real economies of 10 eurozone countries.  

In Credit Prices vs. Credit Quantities as Predictors of Economic Activity in Europe: Which Tell a Better Story?, Alfred V Guender presents three sets of credit spreads and a measure of total outstanding credit.

The first measure is the spread between the cost of borrowing for non-financial corporations from cred