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Explain what each of the four terms in the model are meant to measure. In the Svensson (1994) model of the term structure of interest

Explain what each of the four terms in the model are meant to measure.image text in transcribed

In the Svensson (1994) model of the term structure of interest rates r(t) = + (1e ) / ,t + , (((1 e, ) / 2,t) e^) Ot 2t -22. + 31 ((( e ) / 2,5) - e-^2,) 3t Where rt (T) is the interest rate at time t of maturity 7 Bot, B1, B2t and B3t are estimated parameters At and A2t are decay parameters. Explain what each of the four terms in the model are meant to measure

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