Question: The following figure shows the path of the 10-year bond yields of the advanced economies.

(a) Explain why the Australian yield is generally higher than the others, referring to commodity price volatility and detailing the reasons why this volatility is different from that experienced in global markets for manufactures.

(b) Explain why the yields tend to move up and down together.

(c) Speculate on why Japans 10-year bond yield has been lower than those of the other advanced economies.

10 Year Nominal Government Bond Yields (% per annum) M United Kingdom V United W ww States European Union 1990 1992 1995 1996 2001 2004 2007 2010 2013 2016 10 Year Nominal Government Bond Yields (% per annum) M United Kingdom V United W ww States European Union 1990 1992 1995 1996 2001 2004 2007 2010 2013 2016