Abstract
It has been empirically shown in the USA that a positive slope of the yield curve is associated with a future increase in real economic activity. However, the present study's empirical examination reveals that the term structure in Japan has almost no predictive power for real economic changes, whereas it does in Canada and the USA. Further, the additional investigation, which exploits spectral analysis, clarifies that the yield-curve's slope and real economic growth in the USA and Canada have similar cyclical components. However, the term structure in Japan exhibits few business cycle components, and this may account for the lack of predictive power.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.