Question: How did the Great Depression 1930 33 and the Great Recession
How did the Great Depression (1930-33) and the Great Recession of 2007-2009 affect expectations of corporate default? To investigate, construct for each of those periods a separate plot of the corporate bond yield spread. For the depression period, plot from 1930 to1933 to the difference between the Baa corporate bond yield (FRED code: BAA) and a long-term Treasury bond yield (FRED code: LTGOVTBD). For the Great Recession, plot from 2007 to 2009 the difference between the Baa yield (FRED code: Baa) and the 10-year Treasury bond yield (FRED code: GS10).Compare the plots.
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