Technically, the three-part model helps us to understand the determinants of interest rates in general, but tells us nothing about a certain interest rate. The vagueness of the three-part model is useful when first learning, international macroeconomics, but is untenable, as we move towards a better understanding of the interest rates. This technical note is much closer to real and nominal interest rates, a more comprehensive IS / LM model as a driver of general movements in the international … Read more »

Technically, the three-part model helps us to understand the determinants of interest rates in general, but tells us nothing about a certain interest rate. The vagueness of the three-part model is useful when first learning, international macroeconomics, but is untenable, as we move towards a better understanding of the interest rates. This technical note is much closer to real and nominal interest rates, a more comprehensive IS / LM model as a driver of general movements in interest rates, presenting a supply and demand model for bonds discuss further improve our understanding of changes in interest rates and the yield curve to us about the relationship between similar bonds with different maturities.
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Francis Warnock
14 pages.
Release Date: 20, March 2006. Prod #: UV0994-PDF-ENG
The determinants of interest HBR case solution

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