Firm characteristics, economic conditions and policy regimes are the key determinants that most researchers have used to explain corporate bond yield spreads. In this article, we examine whether monetary policy shocks are also important determinants given their ability to affect default risk,...

Knowing the stance of monetary policy is important for its successful implementation. Typically, observers look to the changes in the money supply and short-term interest rates to determine the stance of monetary policy. Sometimes, however, discerning the stance of monetary policy through these...