Preferred habitat and the term structure of interest rates in DSGE models
The aim of the present study is to use an alternative approach to derive the term structure of interest rates in DSGE models, which is based on the theory of preferred habitat. We show that this approach yields a substantial term premium which is time-variant. In particular, by introducing bonds of...
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| Format: | Article |
| Language: | English |
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Taylor & Francis Group
2019-01-01
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| Series: | Journal of Applied Economics |
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| Online Access: | http://dx.doi.org/10.1080/15140326.2019.1680124 |