The changing slope of the yield curve and economic prospects of an EconomyThis assignment is designed to understand howthe changes in yield curv es provide possible ex lanation for the changes in economic prospect
of an economy. The students are required to select two developed economies, one being Australia, to compare the shape of the yield curve and
its impact on the future economic pro spects.
Task 2 $5 marks)
The yie d curve has been a good leading indicator of economic activities.Critically examine howthe changes in the slope ofthe yield curv e (long term treasury yield – shortterm treasury yield) provides possible explanation for changes in economic prospect of an economy.
For thistask, students are required to collect data seriesfor a long term Treasury bond rates and short term t-notes (T-bill rate for US) over a period of time from December,2009 through December 2013, and economic growth over the same at quarterly interval.