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The Term Structure of Interest Rates in India / Rajnish Mehra, Arunima Sinha.

NBER Working papers Available online

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Format:
Book
Author/Creator:
Mehra, Rajnish.
Contributor:
National Bureau of Economic Research.
Sinha, Arunima.
Series:
Working Paper Series (National Bureau of Economic Research) no. w22020.
NBER working paper series no. w22020
Language:
English
Physical Description:
1 online resource: illustrations (black and white);
Place of Publication:
Cambridge, Mass. National Bureau of Economic Research 2016.
Summary:
We examine the term structure of interest rates in India to see if the yield curve can be rationalized based on the 'expectations hypothesis'. Although we find evidence of predictability for holding period returns, we reject the null hypothesis that the expectations hypothesis holds for the period under consideration. Contrary to the finding in the US, the volatility of Indian bond returns is consistent with the expectations hypothesis. Returns on long-term bonds are less volatile than those of short-term bonds. The volatility puzzle documented by Shiller on US data is not observed in Indian bond returns.
Notes:
Print version record
February 2016.

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