Market Expectations Revealed: How Forward Interest Rates Impact Economic Predictions.
The article shows how forward interest rates in Sweden from 1992 to 1994 can predict future interest rates, inflation rates, and currency depreciation. These rates help to understand what the market expects for short, medium, and long-term periods better than the standard yield curve. The researchers used a more flexible method to estimate these forward rates, which can provide valuable insights for monetary policy decisions.