The Structure of Interest Rates

I. Assumptions, 36. — Five propositions concerning the relationship between short and long rates, 37. — II. Influence of the costs of investment, 41. — Shiftability on the lenders' side, 43. — Two complications: many maturities, 44; the function of banks as changers of maturities, 45. — III. Th...

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Bibliographic Details
Published inThe Quarterly journal of economics Vol. 55; no. 1; pp. 36 - 63
Main Author Lutz, F. A.
Format Journal Article
LanguageEnglish
Published MIT Press 01.11.1940
Harvard University Press
Subjects
Bank loans
Economic expectations
Financial instruments
Financial investments
Interest
Interest rates
Investors
Lenders
Market prices
Rates
Yield
Yield to maturity
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Summary:I. Assumptions, 36. — Five propositions concerning the relationship between short and long rates, 37. — II. Influence of the costs of investment, 41. — Shiftability on the lenders' side, 43. — Two complications: many maturities, 44; the function of banks as changers of maturities, 45. — III. The influence of risk, 46. — IV. Expectations: the rational investor's decisions, 48; possible inconsistencies, 49. Effect of divergent expectations among members of the market, when the majority expect rising interest rates, 51; when “the market” expects rates to fall, 54. — V. Verification: movement of interest rates over time, 55; structure of yields on different maturities, 56. — VI. Bearing of this analysis on: influence of the discount rate on investment, 60; interest and the marginal efficiency of capital, 60; influence of wide gaps between short and long rates, 61; the “liquidity theory of interest,” 62.
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ObjectType-Article-1
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ISSN:0033-5533
1531-4650
DOI:10.2307/1881665