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We develop and estimate a tractable equilibrium term structure model populated with rational but heterogeneously informed traders that take on speculative positions to exploit what they perceive to be inaccurate market expectations about future bond prices. The speculative motive is an important driver of trading volume. Yield dynamics due to speculation are (1) statistically distinct from classical term structure components due to risk premiums and expectations about future short rates and are orthogonal to public information available to traders in real time and (2) quantitatively important, accounting for a substantial fraction of the variation of long maturity U.S. bond yields. [ABSTRACT FROM AUTHOR]

Mortgages are long-term loans with nominal payments. Consequently, in incomplete asset markets, monetary policy can affect housing investment and the economy through the cost of new mortgage borrowing and real payments on outstanding debt. These channels, distinct from the traditional real rate channel, are embedded in a general equilibrium model. The transmission mechanism is stronger under adjustable-rate mortgages compared with fixed-rate mortgages. Further, persistent monetary policy shocks affecting the level of the nominal yield curve have larger real effects compared with transitory shocks. Persistently higher inflation gradually benefits homeowners under FRMs, but hurts them immediately under ARMs. [ABSTRACT FROM AUTHOR]

The article argues that the U.S. monetary policy is likely to be restrictive but it may be less restrictive than previously thought. Topics discussed include implication of long-term bond yields, one strategy for a more model-light measurement of interest rates, and a convenient first step for obtaining a market-based measure of interest rates.

Forest aboveground biomass (AGB) is an important attribute informing on carbon storage, forest function, and habitat condition. Accurate knowledge of current AGB and its dynamics is essential for sustainable forest management and carbon monitoring. Common methods for estimating AGB, such as permanent sample plots, yield curves, or simulations, often fail to adequately capture the spatial distribution and structural complexity of forest attributes. To address these limitations, we present an integrated model-driven, data-informed approach for developing AGB yield curves exclusively from remotely sensed data, including an annual time series data of Landsat informed annual AGB values, tree species composition, and age. We applied this approach to a 76.5 million-hectare study area, encompassing diverse forest conditions, species, and ages, partitioned into 34 150 × 150-km analysis tiles to account for local variation. The 37-year AGB time series (1984–2021) were filtered to create a representative and noise-reduced sample set for developing remote sensing-derived AGB yield curves (RSYC). Using a nonlinear mixed-effects modeling framework, we generated 127 RSYC models for eight tree species across the study area. Developed yield curves offered insights into AGB dynamics across different forest types and conditions. The performance of RSYC models was evaluated using three independent datasets: permanent sample plots, existing yield curves, and an established growth and yield simulator. Assessment of the RSYC models showed the influence of geographic position and tree species representation in the reference data. In general, the RSYC models tended to underestimate AGB and AGB increments, with relative RMSE ranging between 22.66% and 70.30% for permanent sample plots. We discuss the challenges associated with model validation, data filtering processes, and the advantages of utilizing wall-to-wall AGB time series data from remote sensing. Our findings confirm the feasibility of developing AGB yield curves exclusively from remotely sensed data, covering a wide range of species and stand structural conditions representing a large spatial extent. [Display omitted] • AGB yield curves developed using remotely sensed information exclusively. • Models informed by annual AGB values, tree species, and age. • Data-informed filtering was applied to obtain a noise-reduced sample. • Locally representative yield curves generated for eight tree species. • Yield curves slightly underestimate AGB, with results varying by species and location. [ABSTRACT FROM AUTHOR]

Mexico's fiscal response to the pandemic has been modest compared to its peers, reflecting the authorities' desire to not issue new debt for spending. This approach, however, resulted in a more severe recession in 2020 and a weaker economic recovery, notwithstanding spillovers from the United States. Balancing the need for stronger near-term fiscal support for the people and the recovery against medium-term discipline, this paper lays out an alternative strategy. We show that credibly announcing a pro-growth and inclusive medium-term fiscal reform upfront—including increased tax capacity, higher public investment and strengthened social safety nets—would open space for larger short-term support and close medium-term fiscal gaps. Model simulations suggest that this package would boost output, limit lasting economic damage from the pandemic, and put debt trajectory on a declining path in the medium term as tax reforms pay off and risk premia decline. [ABSTRACT FROM AUTHOR]

The multiphoton ionization of (CF3I)nXem mixed clusters formed at the outflow of a mixture of CF3I and Xe from an ultrasonic pulsed nozzle by femtosecond ultraviolet radiation (λ = 266 nm) has been studied. The formation of XeI+ mixed ions and ions in intracluster reactions has been detected. It has been shown that the efficiency of the formation of XeI+ ions significantly depends on the duration of a laser pulse: ultraviolet picosecond radiation is necessary for their formation. The kinetic yield curves of the XeI+ and ions upon ultraviolet multiphoton ionization of (CF3I)nXem mixed clusters have been measured. The characteristic times of their formation determined from these curves are (53 ± 8) ps and (65 ± 6) ps, respectively. [ABSTRACT FROM AUTHOR]

The sustainability of the Italian government debt has been under close scrutiny since the launch of the Euro Area, and even more so after the Global Financial Crisis. The Covid-19 crisis in 2020 has depressed the Italian economy further and negatively affected the government budget. Despite the rebound in 2021, the state of the economy and government debt in Italy remain precarious. Building on Pasinetti's work, this paper examines the sustainability of the Italian government debt through a medium-scale, stock-flow consistent, structural macroeconometric model. The model has been coded and calibrated using the R package Bimets developed by the Bank of Italy. Our findings show that the Italian government debt is unlikely to enter a sustainable trajectory in the next few years. While the Next Generation EU and the other fiscal and monetary measures are helping the Italian economy to recover, in the coming years, a greater effort on the part of the European authorities—including an intervention of the ECB in controlling the yield curve—seems necessary to stabilize the debt to GDP ratio in Italy. [ABSTRACT FROM AUTHOR]

We investigate the response of UK asset prices to a large set of domestic scheduled macroeconomic announcements using data at a daily frequency from 1998 to 2017. Our results are mostly consistent with economic theory and follow two general patterns: (1) a stronger-than-expected economy raises stock returns, causes the home currency to appreciate, makes the yield curve steeper, and lowers the corporate credit quality spread; (2) higher-than-anticipated inflation leads to an appreciation of the domestic currency and raises the slope of the yield curve. Surprises about retail sales, claimant count rate, GDP, and industrial production have the most prevalent effects across the four asset classes in our data set. A large number of macroeconomic announcements increase trading activity in the stock market, whereas there is barely any (only minor) evidence that announcements (surprises) affect the volatility of asset prices. We also document that the effects of macroeconomic surprises are contingent not only upon the state of the economy but also on the state of the stock market (bull vs. bear). [ABSTRACT FROM AUTHOR]

A key technique for modeling 2D objects is built using a Bézier-like rational quadratic trigonometric function with two form parameters. Since they are generated employing weights, the suggested rational quadratic trigonometric spline curve schemes are helpful for shape modeling. The established method yields a curve with the best geometric properties, such as convex hull, partition of unity, affine invariance, and diminishing variation. The parameters in the suggested method's construction are helpful for several critical shape features such as local, global, and biased tension qualities, which give good control over the curve and allow for shape modification as desired. In addition, the recommended approach is C 2 . Furthermore, the comparative study of both splines is discussed which revealed the proposed method as a superior alternative to rational cubic spline. [ABSTRACT FROM AUTHOR]

Generalized Bernstein-like functions (gB-like functions) with different shape parameters are used in this work. Parametric and geometric conditions in generalized form are developed. Some numerical examples of the parametric continuity (PC) and geometric continuity (GC) constraints of generalized Bézier-like curves (gB-like curves) are analyzed with graphical representation. Bézier-like symmetric rotation surfaces are constructed by gB-like curves. Vase and Capsule Taurus surfaces are modeled with the help of symmetry. The effect of shape parameters on surfaces are also analyzed. The illustrating figures reveal that the proposed curves and surfaces yield an accommodating strategy and mathematical depiction of Bézier curves and surfaces, allowing them to be a beneficial way to describe curves and surfaces. [ABSTRACT FROM AUTHOR]

Structural changes have taken place in the markets of credit default swap (CDS) and Japanese Government Bond (JGB) after the Bank of Japan (BOJ) introduced yield curve control (YCC) under a negative interest rate policy. CDS and JGB markets were segmented before the introduction of YCC. Whether CDS markets function as insurance against the JGB market or cannot be confirmed because no causalities were found between CDS and JGB markets. However, they are integrated under a negative interest rate policy with YCC. The CDS market does not function as insurance because unilateral causalities from CDS to JGB markets were found. The purpose of YCC's introduction was an upward adjustment of the yield curve because the flattening of the yield curve damaged bank profits. A positive yield in a 10‐year JGB has become an incentive to investors. The markets of CDS and JGB have started to be integrated because JGB has regained a market and price discovery function with the introduction of YCC. [ABSTRACT FROM AUTHOR]

This article presents a simple reformulation of the restricted Cieslak and Povala return-predicting factor, which retains by construction exactly the same (impressive) explanatory power as the original but affords an alternative and attractive interpretation. What determines the future returns, the new formulation shows, is a function of the distance of the yield-curve level and the slope not from a fixed reference level, but from a conditional one, determined by a function of the long-term inflation. The decomposition also allows a clear attribution of the predictive power of the Cieslak and Povala factor between the conditional level and slope deviations. The authors present new empirical evidence to show that, consistent with the interpretation they present, inflation surprises are powerful out-of-sample predictors of Treasury excess returns. [ABSTRACT FROM AUTHOR]

These portfolio balance effects should not only reduce longer term yields on the assets being purchased but should also spill over into the yields on other assets. All these effects are at work in WW, who estimate VAR models identified, in the baseline version, with a Cholesky decomposition, and find that a one-percent of GDP-equivalent increase in asset purchases induces a decline of long term interest rates, an increase of asset prices and in both economic activity and inflation. Keywords: threshold vector autoregression; transmission mechanism; unconventional monetary policy EN threshold vector autoregression transmission mechanism unconventional monetary policy 205 218 14 04/29/22 20220401 NES 220401 1 Introduction After the global financial crisis (GFC), with interest rates at the zero lower bound (ZLB), major central banks embarked in large-scale asset purchases (LSAPs) to provide monetary stimulus to the economy, the so called quantitative easing (QE). Imperfect substitutability of assets implies that changes in the supplies of various assets available to private investors may affect the prices and yields of those assets. [Extracted from the article]

This article develops a class of adaptive cointegration tests for multivariate time series with nonstationary volatility. Persistent changes in the innovation variance matrix of a vector autoregressive model lead to size distortions in conventional cointegration tests, which may be resolved using the wild bootstrap, as shown in recent work by Cavaliere, Rahbek, and Taylor. We show that it also leads to the possibility of constructing tests with higher power, by taking the time-varying volatilities and correlations into account in the formulation of the likelihood function and the resulting likelihood ratio test statistic. We find that under suitable conditions, adaptation with respect to the volatility process is possible, in the sense that nonparametric volatility matrix estimation does not lead to a loss of asymptotic local power relative to the case where the volatilities are observed. The asymptotic null distribution of the test is nonstandard and depends on the volatility process; we show that various bootstrap implementations may be used to conduct asymptotically valid inference. Monte Carlo simulations show that the resulting test has good size properties, and higher power than existing tests. Empirical analyses of the U.S. term structure of interest rates and purchasing power parity illustrate the applicability of the tests. [ABSTRACT FROM AUTHOR]

Summary: The term structure of interest rates is crucial for the transmission of monetary policy to financial markets and the macroeconomy. Disentangling the impact of monetary policy on the components of interest rates, expected short rates, and term premia is essential to understanding this channel. To accomplish this, we provide a quantitative structural model with endogenous, time‐varying term premia that are consistent with empirical findings. News about future policy, in contrast to unexpected policy shocks, has quantitatively significant effects on term premia along the entire term structure. This provides a plausible explanation for partly contradictory estimates in the empirical literature. [ABSTRACT FROM AUTHOR]

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There are alternative providers of zero‐coupon yield curve datasets. This essential input for most financial purposes can also be estimated from cross‐sectional market price information. Although all these datasets are representations of the same reality, each dataset provides estimations from different baskets of assets and different fitting techniques. As the properties of the yield curves and their time series dynamics are different, the results of pricing interest rate derivatives may be sensitive to the choice among these datasets. We compare our own spot rates estimation from GovPX bond data and three popular available interest rate datasets. From an empirical exercise on pricing callable bonds, we observe relevant differences in economic terms when volatilities from different inputs are used. Therefore, financial institutions may have an incentive for choosing unduly one or another yield curve dataset in their self‐interest, raising a moral hazard problem. [ABSTRACT FROM AUTHOR]

NASA’s TESS mission yields light curves for tens of millions of stars spread across the entire sky, a data set that will be a challenge to fully exploit without help from citizen scientists. To address this, we launched a new citizen science project, called “Planet Patrol”, designed to analyze TESS data on exoplanet and eclipsing binary candidates. The project will also serve to benchmark different data reduction pipelines and help analyze unusual light curves that might defeat automated algorithms. The first stage of the project ran on the Zooniverse platform between 2020 September and November and involved more than 5500 registered volunteers. The Planet Patrol citizen scientists produced nearly 400,000 classifications of difference images used for photocenter analysis of about 1000 planet candidates from TESS. The results were incorporated into the photocenter module of the Discovery And Vetting of Exoplanets (DAVE) pipeline to improve its reliability. Specifically, the classifications indicated that all per-transit difference images are appropriate for photocenter analysis for about 40% of the planet candidates, and the corresponding measurements are sound. In contrast, the volunteers found that all per-transit difference images are dominated by astrophysical contamination and/or systematic effects for about 10% of the planet candidates. This indicated that the corresponding photocenter measurements are unreliable. Finally, the fraction of images appropriate for photocenter analysis varies between 0 and 1 for half the candidates. Removing the images classified as poor from DAVE’s analysis of most of these candidates helped reduce the corresponding photocenter uncertainty by up to ∼30%. We plan to implement the output from another module of DAVE, designed for lightcurve vetting, into a second stage of the Planet Patrol project. [ABSTRACT FROM AUTHOR]

Unconventional monetary policies are currently implemented in several advanced economies. One of them is known as "yield‐curve control," a policy presently active in Australia. Ordinary pictorial descriptions of this policy do not usually discuss the market mechanism presupposed by the yield‐curve control approach nor the economic logic underpinning the expected outcome of this policy tool. The present letter adopts a pedagogical approach and provides an exposition of yield‐curve control that separates the immediate effects of the policy from their concomitant economic effects on spending and portfolio investment. [ABSTRACT FROM AUTHOR]

The present work describes a method to determine excitation function curves and, therefore, cross-sections, making use of the irradiation of liquid targets at distinct energies in a biomedical cyclotron. The method relies on the derivative of experimentally measured thick target yield curves to determine the corresponding excitation function curves. The technique is presented as a valid and practical alternative to the commonly used activation method combined with the stack monitor technique, whose implementation in liquid targets offers practical difficulties. The working principle is exemplified by presenting the results obtained for the clinically relevant 68Zn(p,n)68Ga and the 64Zn(p,α)61Cu nuclear reactions, obtained though the irradiation of liquid targets containing dissolved natural zinc. [ABSTRACT FROM AUTHOR]

Most representative decision-tree ensemble methods have been used to examine the variable importance of Treasury term spreads to predict US economic recessions with a balance of generating rules for US economic recession detection. A strategy is proposed for training the classifiers with Treasury term spreads data and the results are compared in order to select the best model for interpretability. We also discuss the use of SHapley Additive exPlanations (SHAP) framework to understand US recession forecasts by analyzing feature importance. Consistently with the existing literature we find the most relevant Treasury term spreads for predicting US economic recession and a methodology for detecting relevant rules for economic recession detection. In this case, the most relevant term spread found is 3-month–6-month, which is proposed to be monitored by economic authorities. Finally, the methodology detected rules with high lift on predicting economic recession that can be used by these entities for this propose. This latter result stands in contrast to a growing body of literature demonstrating that machine learning methods are useful for interpretation comparing many alternative algorithms and we discuss the interpretation for our result and propose further research lines aligned with this work. [ABSTRACT FROM AUTHOR]

We compare the implications of speculation versus hedging channels for bond markets in heterogeneous agents' economies. Treasuries command a significant risk premium when optimistic agents speculate by leveraging their positions using bonds. Disagreement drives a wedge between marginal agent versus econometrician beliefs (sentiment). When speculative demands dominate, the interaction between belief heterogeneity and sentiment helps rationalize several puzzling characteristics of Treasury markets. Empirically, we test model predictions and find that larger disagreement (i) lowers the risk-free rate, (ii) raises the slope of the yield curve, and (iii) with positive sentiment increases bond risk premia and makes its dynamics countercyclical. This paper was accepted by Karl Diether, finance. [ABSTRACT FROM AUTHOR]

Products from Xanthoceras sorbifolium Bunge seed have gained extensive attention for various applications, especially in the fields of edible oils and industrial applications. In order to study seed kernel mechanical–structural behavior and oil yield mechanisms during extrusion, we set up a self-developed texture analyzer with in situ microscope observation. Test results indicated that seed kernel oil yield and pressing energy showed an approximately parabolic shape under pressing strain, and maximum oil yield reached 25.7%. Only local tissue damage occurred on seed kernels at strain 45–85%, cracks formed from the kernel edge to the inside zone and small cracks obviously increased in number, corresponding with the oil yield and energy–strain curve. The effect of speed on oil yield showed an opposite trend to strain effect; high pressing speed led to lower oil yield due to the short time for oil precipitation and lower pressing energy. Dwell time obviously promoted oil output within 600 s. Drying temperature had a negative effect due to structural change. Oil yield was almost zero at temperatures below 120 °C. The oil yield and pressing energy relation curve was obtained by polynomial fitting; optimal seed kernel oil pressing conditions were strain 95%, 0.1 mm/s, 20 °C, dwell time 600 s. The research provides in-depth theoretical guidance for Xanthoceras sorbifolium Bunge oil production. [ABSTRACT FROM AUTHOR]

We present the pricing of the documented excess volatility of the foreign exchange risk premium, relative to the interest rate differential. By specifying a term structure of interest rate model, the physical probability measure along with the pricing kernels or discount factors are used to derive a system for the expected future spot rate and the forward rate. The theoretical loads are found by solving the Riccati ordinary differential equations, and dynamic factors are captured to set up the global factors for both currencies. It shows that we prove the interest-rate surfaces are almost identical to the empirical ones, and the theoretical interest rates are guaranteed to be positive. [ABSTRACT FROM AUTHOR]

We shed light on computational challenges when fitting the Nelson-Siegel, Bliss and Svensson parsimonious yield curve models to observed US Treasury securities with maturities up to 30 years. As model parameters have a specific financial meaning, the stability of their estimated values over time becomes relevant when their dynamic behavior is interpreted in risk-return models. Our study is the first in the literature that compares the stability of estimated model parameters among different parsimonious models and for different approaches for predefining initial parameter values. We find that the Nelson-Siegel parameter estimates are more stable and conserve their intrinsic economical interpretation. Results reveal in addition the patterns of confounding effects in the Svensson model. To obtain the most stable and intuitive parameter estimates over time, we recommend the use of the Nelson-Siegel model by taking initial parameter values derived from the observed yields. The implications of excluding Treasury bills, constraining parameters and reducing clusters across time to maturity are also investigated. [ABSTRACT FROM AUTHOR]

Purpose: This study aims to address the fundamental question on how the major players in the economy dynamically interact with each other: among the central bank, the investors in the bond market and the firms and consumers that contribute to the economic growth, who gets information from whom, when and why? Design/methodology/approach: To answer "who follows whom," the authors apply a novel technique to examine the lead–lag relations between three time series, the federal funds rate, the treasury yield curve and the gross domestic product (GDP). To investigate "when and why," the authors combine the lead–lag relations with principal component analysis to cluster economic states that are similar with respect to the eight macroeconomic variables. Findings: The authors show that during the period 1977–2019, the bond market potentially obtained information from the federal funds rate (61% of the time) and less often (34% of time) from the changes in the GDP. Meanwhile, the funds rate decision by the Federal Reserve seems to lead the economic growth about 63% of the time. The analysis also suggests that the bond market obtained information directly from GDP when unemployment and inflation was high. In addition, the authors find that the federal funds rate was leading the GDP when the GDP deviated from the target value, consistent with the Federal Reserve's policy of boosting and damping the economy when the GDP growth is low or high, respectively. Originality/value: This study provides insights into the fundamental questions that have important implications for empirical work on the monetary policy, financial stability and economic activities. [ABSTRACT FROM AUTHOR]

After the Global Financial Crisis of 2008, major central banks entered a phase of "Unconventional Monetary Policies" under zero interest rates. However, at that time, the Reserve Bank of Australia remained on a traditional monetary policy with an interest rate in the zero-plus range. The Reserve Bank of Australia finally enacted their unconventional monetary policies during the COVID-19 crisis from 2020 to 2021. The purpose of this Essay is to clarify the characteristics of the Reserve Bank of Australia's unconventional monetary policies. The first section considers the history of the Reserve Bank of Australia's monetary easing, especially in response to the COVID-19 crisis from 2020. The Reserve Bank of Australia and their Unconventional Monetary Policies are characterized by the simultaneous pursuit of both interest rate and quantity targets. By easing monetary policy in terms of both interest rates and quantity at same time, the effect of monetary easing could be stronger. This also aimed at increasing the flexibility of the bank's exit policy in the future. The second section summarizes the unconventional monetary policies of the Reserve Bank of Australia from the point of view of an academic classification. Thus, the Reserve Bank of Australia's unconventional monetary policies are summarized as adopting a balance sheet policy, forward guidance, yield curve control, and funding for lending financings. So far, these are not yet to be select tools for independent inflation expectations and negative interest rate policy. The third section considers policy differences between the Reserve Bank of Australia and the Bank of Japan in light of yield curve control. Thus, the yield curve control adopted by the Reserve Bank of Australia looks much more like monetary easing than the yield curve control adopted by the Bank of Japan. The reasons for these differences come from the financial environment that existed when yield curve control was first introduced by the two banks. [ABSTRACT FROM AUTHOR]

We examine the short‐term stock reactions to yield curve inversions. Our country‐level analysis reveals that including the United States, only 13 out of 41 countries exhibit significantly negative stock returns when yield curves invert. Hence, while inverted yield curves act as a negative signal in some countries, it is not a ubiquitous rule internationally. Our firm‐level analysis is the first of its kind. We find that company stocks exhibit strong responses with 3‐day cumulative abnormal returns averaging −1.22% globally and − 2.83% for US firms. The results suggest that corporate bond yield curves contain valuable information of firms' future performance. [ABSTRACT FROM AUTHOR]

In this work, we construct a class of Hermite-type interpolation basis functions based on the sixth-order ordinary differential equation S (6) (t) - τ 4 S (2) (t) = 0 . Using them, we propose a kind of C 2 tension interpolation splines with a local tension parameter τ i . For C 2 interpolation, the given interpolant has O (h 2) convergence. Some applications of the C 2 tension interpolation splines on the construction of interest rate term structure in Chinese financial market are given. Moreover, a kind of generalized non-uniform B-splines of the space spanned by span 1 , t , ... , t n - 4 , sin (τ t) , cos (τ t) , sinh (τ t) , cosh (τ t) is constructed. [ABSTRACT FROM AUTHOR]

The self-sputtering yield of the (100) face-centered cubic crystal surface consisting of particles interacting with the Lennard–Jones (LJ) potential is presented as a function of the normalized incident particle kinetic energy for normal incidence. Because the self-sputtering yield depends only on the normalized incident energy, the yield curve presented here is the universal curve, independent of the Lennard–Jones parameters, and therefore serves as the fundamental reference data for the LJ system. The self-sputtering yield data are also compared with experimentally obtained self-sputtering yields of some metals, which shows reasonable agreement at relatively low ion incident energy where mostly deposition occurs. At higher ion energy, the self-sputtering of such an LJ material does not represent those of real solids. This is because the repulsive interactions of the LJ potential do not represent those of actual atoms at short distances. The angle dependence of the self-sputtering yield is also presented for some selected normalized energies. [ABSTRACT FROM AUTHOR]

The use of futures instead of forwards exchange contracts completes the maturity spectrum of the correlation between spot yields and the premium. We find that the forward premium puzzle appears to be a precrisis phenomenon and is only observed for maturities longer than about 1 month. Differences in the exposure to risk help to explain cross‐sectional spreads in currency excess returns. However, this only applies for medium and longer maturities. Considering that most studies that test the validity of a risk‐based approach to currency excess returns focus on short maturity securities, this explains why this approach is so often rejected. [ABSTRACT FROM AUTHOR]

Real-world market quotes of bonds can sometimes contradict the no arbitrage principle within the discounted cash flow model. This makes some kinds of no-arbitrage-based analyses impossible, e.g., inferring the bounds for the term structure of interest rates. Instead of using a more sophisticated model to account for pricing peculiarities, we propose a replacement for the no arbitrage principle. While being theoretically plausible, it does not get contradicted by the data – thus, we can infer the same kind of term structure bounds from it, even given the contradictions with the no arbitrage principle. Using a dataset of Russian sovereign bond quotes, we show that the no arbitrage inconsistency problem arises in 10–20% of cases and that the proposed approach successfully overcomes it. [ABSTRACT FROM AUTHOR]

The hypothesis that people can make non-learned numerical estimates of ratios of subjective magnitude is still unverified after over more than a century of research. Participants were asked to numerically estimate brightness ratios of pairs of surfaces whose luminances were combined factorially. With one luminance in a pair as the parameter, the ability to estimate ratios numerically predicts that the plotting of numerical estimates against the other luminance yields diverging curves that increase in height with the range of luminances. The present study found that statistically such curves were parallel and their height was constant with luminance range. These results support the hypothesis that people numerically rate subjective differences while they are performing the task to numerically estimate subjective ratios. Implications for theory and practice are discussed. [ABSTRACT FROM AUTHOR]