Category: Think Tank

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

4 Responses to “What Caused the Decline in Long-term Yields?”

  1. spencer says:

    This is a good analysis, but it still looks at
    the US economy and ignores the point that
    the UK, Germany, Japan and others had very
    similar yield declines.

    In an open economy with a current account deficit
    the equilibrium interest rate is the yield that attracts
    sufficient foreign capital to finance the current
    account ( savings – investment) deficit with a
    stable currency. If the currency is rising, yields
    are probably too high, but if the currency is
    falling rates may be too low.

    In looking at the role international capital flows played
    in the US financial markets since 1980 how can
    anyone take an analysis that ignores this seriously?

  2. boveri says:

    The study seems valid to me and interestingly if I look at the last five years of rock-bottom interest rates, I also do not see any negative impact on the value of the dollar, which in fact has risen over the past five years.

  3. Willy2 says:

    Increased labour productivity has led to lower and lower interest rates. Increasing labor productivity leads to a decreased demand for capital. And less demand for capital means that the price of capital (a.k.a. interest rates) comes down as well.