IDEAS home Printed from https://ideas.repec.org/a/icf/icfjbm/v02y2003i2p28-50.html
   My bibliography  Save this article

`Yield Curve’ as a Predictor of the Behavior of the Economy: An Empirical Evidence from the Indian Economy

Author

Listed:
  • S Venkata Seshaiah
  • GRK Murty

Abstract

Economists often tend to use complex and complicated models to predict the path of the economy and the likelihood of recession. The present paper explores the scope of using the yield curve as a tool to predict the future behavior of the economy by analyzing interest rate movements during the last 30 years and studying the relationship between the interest rates, maturity premium and expected inflation. The effects of real GNP and long term real interest rates on investment expenditure behavior during 1971- 2001 have also been discussed. The whole approach to the analysis of relationship between various macroeconomic fundamentals and the inferences that could be drawn from the yield curve are basically aimed at facilitating a practicing banker to cultivate the habit of looking at these macroeconomic fundamentals with ease and accordingly manage their assets and liabilities in such a fashion that net interest margin always remains healthy.

Suggested Citation

  • S Venkata Seshaiah & GRK Murty, 2003. "`Yield Curve’ as a Predictor of the Behavior of the Economy: An Empirical Evidence from the Indian Economy," The IUP Journal of Bank Management, IUP Publications, vol. 0(2), pages 28-50, MAY.
    • Handle: RePEc:icf:icfjbm:v:02:y:2003:i:2:p:28-50
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:icf:icfjbm:v:02:y:2003:i:2:p:28-50. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: G R K Murty (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.