James Van Horne, A Linear-Programming Approach to Evaluating Restrictions Under a Bond Indenture or Loan Agreement, The Journal of Financial and Quantitative Analysis, Vol. 1, No. 2 (Jun., 1966), pp. 68-83

Journal Article The Expectations Hypothesis, the Yield Curve, and Monetary Policy: Comment Get access James van Horne James van Horne Stanford University Search for other works by this author on: Oxford Academic Google Scholar The Quarterly Journal of Economics, Volume 79, Issue 4, November 1965, Pages 664–668, https://doi.org/10.2307/1880659 Published: 01 November 1965

RECENT efforts by the Federal Reserve and Treasury to affect the shape of the yield curve have aroused considerable interest and controversy. These efforts, known as operation twist or nudge, were designed to keep short-term interest rates fairly high for balance-of-payments purposes, while keeping intermediate and long rates at moderate levels in order to stimulate domestic growth.' Two divergent positions are involved in the controversy. The first, held by many of the proponents of the only policy, is that expected interest rates for various future periods are perfectly elastic, causing different sectors of the yield curve to move together in a fixed proportional manner.2 In this regard, Riefler contends that while initial response to action by the monetary authorities is reflected in the price of the particular security that is bought or sold, the action is later felt throughout the entire yield curve, due to substitution and arbitrage.3 Given this interest-rate behavior, the sector of the yield curve in which the monetary authorities choose to operate makes little difference. The ultimate effect is essentially the same whether open market operations are conducted in bills or in long-term securities. Due to the greater depth, breadth, and resiliency of the bill market, a logical case can be made for confining operations to bills. The second position is that expected interest rates for various future periods are less than perfectly elastic, moving with some degree of independence. To the extent that operations by the monetary authorities in longor intermediate-term securities can affect interest-rate expectations for some future periods independently of expectations for others, the shape of the yield curve can be altered in a manner not possible by operations in short-term securities or only. In this paper, interest-rate expectations are examined empirically through the use of singleand multiple-year errorlearning models. These models are tested using monthly Treasury yield-curve data that appeared in the Treasury Bulletin for the 19541963 period, and the evidence obtained is seen to support the supposition that expected interest rates for various future periods change with some degree of independence.

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This article focuses on the U.S. federal income tax provision of loss carry forward. The operating loss carry-forward is a provision for the off-setting of a prior-year loss against current profits. This provision has created the accounting problem of how the tax reduction arising from the carry-forward should be treated on financial statements and, more particularly, on the profit and loss statement. The problem concerns the investor, the creditor, and the other readers of financial statements of companies utilizing the carry-forward. The importance of the loss carry-forward provision to a company is, of course, that it preserves valuable cash which otherwise would have to be paid out in taxes. Such funds are retained in the business and can be used for working capital and/or expansion of fixed or other non-current assets. A company which has alternate profit and loss years of about the same dimension would pay no tax at all. Consequently, this study is directed toward eliminating such confusion by finding the best method of treating the tax reduction arising from the carry-forward.