The monetary policy targets the very short end of the yield curve although real economic activity is largely dependent upon the medium to long- term market interest rates. Conventional wisdom is that decrease in the monetary policy target rate leads to an immediate decrease in market interest...

The question of how do the monetary policy translate across the yield curve remain at the forefront of many recent policy debates. The monetary policy targets the very short end of the yield curve although real economic activity is largely dependent upon the medium to long- term market interest...