The study looked at how Japan's zero interest rate policy affects the relationship between the yield curve and monetary policy. By using a macro-finance model and Black's model of interest rates as options, the researchers found that the zero rate has a big impact on nominal yields, but not on real yields. This is because the zero rate makes real yields closely tied to expected inflation rates, which are harder to control. The study also found that the real yield curve is very flat and more stable than the nominal one.