Term Structure of Interest Rates

Discipline: Economics

Term structure of interest rates refers to the relationship between the fixed amount of interest paid on a financial security (such as a government or corporate bond) and the amount of time before the bond reaches its maturity date.

Early work on this theory of expectations was carried out by US economist Irving Fisher (1867-1947) and English economist John Hicks (1904-1989).

Also see: adaptive expectations, random walk hypothesis, rational expectations theory, time preference theory of interest


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