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ARTÍCULO
TITULO

The Macroeconomic Imbalance Procedure: A useful tool for predicting sovereign crises?

Alejandro Arahuetes García    
Gonzalo Gómez Bengoechea    

Resumen

This paper provides an empirical analysis of the Macroeconomic ImbalanceProcedure (MIP). It explores the relationship between sovereign bond yieldsspreads and the variables contained in the MIP scoreboard using quantileregressions. Results suggest that MIP indicators can explain the behavior ofsovereign spreads two, three and four quarters in advance. The scoreboard can?tcapture strong non-variant country effects that affect the evolution of spreadsas well as the different impact that each indicator has on different countries.The introduction of employment indicators has reduced the aggregate effect thatcountry effects have on sovereign spreads.

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