Government bond term premia during the pandemic
This is a preview from the National Institute Economic Review, November 2020, no 254.
The Box examines the behaviour of government bond yields in the US, the UK and Europe, assessing – in particular – whether investors have demanded higher term premia following an upsurge in uncertainty since the Covid-19 shock. The evidence suggests that central banks’ asset purchase programmes such as quantitative easing, as well as higher savings and lower investment demand, resulted in term premia which do not compare in scale with what was observed at the height of the Global Financial Crisis.
The analysis in this Box has been prepared by NIESR Principal Economist Corrado Macchiarelli.