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Bond spreads and economic activity in eight European economies

Bleaney, Michael; Mizen, Paul; Veleanu, Veronica


Michael Bleaney

Professor of Monetary Economics

Veronica Veleanu


We provide new insights into the relationship between financial market tightness and real activity, using a new database of corporate bonds issued in eight European countries. Bond spreads have a significant negative relationship with four real activity variables at horizons 1–8 quarters ahead. The relationship is robust to adding measures of monetary policy tightness and leading indicators, providing strong support for models previously only evaluated on US data. A subset of northern European countries have similar sensitivity of real GDP to bond spreads, but others have greater sensitivity to bond spreads, revealing diverse responses in Europe to financial market tightness.


Bleaney, M., Mizen, P., & Veleanu, V. (in press). Bond spreads and economic activity in eight European economies. Economic Journal, 126(598),

Journal Article Type Article
Acceptance Date Mar 11, 2015
Online Publication Date Feb 29, 2016
Deposit Date May 9, 2016
Publicly Available Date May 9, 2016
Journal Economic Journal
Print ISSN 0013-0133
Electronic ISSN 0013-0133
Publisher Wiley
Peer Reviewed Peer Reviewed
Volume 126
Issue 598
Public URL
Publisher URL
Additional Information This is the accepted version of the following article: Bleaney, M., Mizen, P. and Veleanu, V. (2016), Bond Spreads and Economic Activity in Eight European Economies. The Economic Journal. doi: 10.1111/ecoj.12288, which has been published in final form at


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