Information contained within the yield curve can help improve forecasts of the macroeconomy, according to a discussion paper published by the Reserve Bank of New Zealand.

Economists Leo Krippner and Michelle Lewis test their macro-financial vector autoregression model against “traditional” macroeconomic models. They deal with the zero lower bound using the concept of a “shadow” rate, a hypothetical rate that would hold if a central bank could cut rates below the lower bound. Krippner won Centra