Recent developments in Australian bond yields
The yield curve typically slopes upwards as bond investors require higher interest rates to hold bonds of longer maturities. For most of 2005, the Australian yield curve has been close to flat, or negatively sloped. The traditional interpretation of such a development is that the bond market expects lower future short-term interest rates and weaker future economic activity. However, this conclusion is at odds with the recent performance of the Australian economy and the outlook for 2005-06. The paper argues that a combination of domestic and international developments have suppressed long-term bond yields.
Volume (Year): (2005)
Issue (Month): 4 (December)
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References listed on IDEAS
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- Arturo Estrella & Frederic S. Mishkin, 1995.
"Predicting U.S. Recessions: Financial Variables as Leading Indicators,"
NBER Working Papers
5379, National Bureau of Economic Research, Inc.
- Arturo Estrella & Frederic S. Mishkin, 1998. "Predicting U.S. Recessions: Financial Variables As Leading Indicators," The Review of Economics and Statistics, MIT Press, vol. 80(1), pages 45-61, February.
- Arturo Estrella & Frederic S. Mishkin, 1996. "Predicting U.S. recessions: financial variables as leading indicators," Research Paper 9609, Federal Reserve Bank of New York.
- Moneta, Fabio, 2003. "Does the yield spread predict recessions in the euro area?," Working Paper Series 0294, European Central Bank.
- Chay Fisher & Bruce Felmingham, 1998. "The Australian yield curve as a leading indicator of consumption growth," Applied Financial Economics, Taylor & Francis Journals, vol. 8(6), pages 627-635.
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