Most empirical studies of the rational expectations hypothesis of the term structure find that the data offer little support for the theory. This observation has led some investigators to search for alternative “irrational” theories of behavior in order to explain the data. The authors, on...

Recently an intense debate has focused on M2's usefulness as an intermediate target for monetary policy. A review of two leading contributions to the debate indicates that their empirical results are sensitive to changes in key assumptions. Moreover, their empirical results lack the deep...