Beliefs about returns are based on current bond prices [[??].sub.t], the current short rate [i.sub.t], as well as the conditional distribution of the vector [([r.sup.res.sub.[tau]], [i.sub.[tau]], [[pi].sub.[tau]], [[??].sub.[tau]], [[??].sup.+1.sub.[tau]]).sub.[ that is, the return on the residual asset, the short interest
rate, the inflation rate and the prices and payoffs on the long spanning bonds.
rate = 0.7 * (inflation - inflation target)--0.4 * (price level - price level target).
First, low short interest
rates and bond yields have encouraged cheap borrowing and enabled private equity specialists to leverage themselves up and to purchase companies on valuations that exploit the difference between money market yields and earnings yields.
The yield curve is the difference between long and short interest
For example, the domestic currency appreciates when the monetary authority increases short interest
rates as a response to a positive output gap.
Banco de Mexico's decision to cap short interest
rates, the selective impact of soaring commodity prices--most notably oil--and the cautiously favorable scenario predicted for the Mexican economy all support further expansion.
The entire sector was flooded with a 9.6% increase in short interest
in the four weeks preceding February 10, followed by a 6.7% increase in the four weeks preceding March 10.
To achieve this objective, the central bank relies on its view of the transmission mechanism of monetary policy--the transmission mechanism that, through several channels, links the central bank's instrument (usually a short interest
rate, the instrument rate) and the target variables (inflation and the output gap in the above formulation of the objective for monetary policy).
reports are compiled monthly by the U.S.
stocks set fire to short-covering in issues whose short interest
exceeds the balance of shares bought on margin,'' said Hiroichi Nishi, an analyst at Nikko Cordial Securities Inc.
The big "short interest
," or shares shorted in Optimal, has now plummeted.
Swedens Riksbank (1996): "Sweden's Riksbank's management of short interest