Certainly each of the foregoing explanations embodies an element of truth, The whole truth is probably some combination of them all,

The expectations theory is the most analytical of the three, in the sense that it offers concrete numerical values for expectations, and hence it can be tested These tests show that it works reasonably well with a deviation that seems to be explained by liquidity preference Hence expectations tempered by the risk considerations of liquidity preference seem to offer a good straightforward explanation.

Was this article helpful?

0 0
Lessons From The Intelligent Investor

Lessons From The Intelligent Investor

If you're like a lot of people watching the recession unfold, you have likely started to look at your finances under a microscope. Perhaps you have started saving the annual savings rate by people has started to recover a bit.

Get My Free Ebook

Post a comment