The economics of money, banking, and financial markets

Following the Financial News  Yield Curves  125

Expectations Theory ........................................................................................................... 127

Segmented Markets Theory ................................................................................................ 130

Liquidity Premium and Preferred Habitat Theories ............................................................. 131

Evidence on the Term Structure ......................................................................................... 134

FYI  The Yield Curve as a Forecasting Tool for Inflation and the Business Cycle  135

Summary ............................................................................................................................ 135

APPLICATION

  Interpreting Yield Curves, 1980–2017 .............................................135

Summary 137  •  Key Terms 137  •  Questions 137  •  Applied Problems 139  •   

Data Analysis Problems  139   •   Web Exercises  140   •   Web References  140