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the interest rate on one-year treasury bonds is 2.2 percent, the rate on two-year treasury bonds is 3.0 percent, and the rate on three-year treasury
the interest rate on one-year treasury bonds is 2.2 percent, the rate on two-year treasury bonds is 3.0 percent, and the rate on three-year treasury bonds is 3.6 percent. These bonds are considered risk free, so the rates given here are risk-free rates. The one-year bond matures one year from today, the 2 year bond matures 2 years from today and so forth. The real risk-free rate for all 3 years is 2 percent. Using the expectations theory, compute the expected inflation rate (a) in the second year and (b) in the third year
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