Government

Table of contents

G-Cubed projections include long nominal and real bond rates for all regions. These include:

  • Nominal 2 year bond rate (NB02)
  • Nominal 5 year bond rate (NB05)

  • Nominal 10 year bond rate (NB10)

  • Real 10 year bond rate (RB10)

These long bond rates are not an input to the model. Rather they are implied by the path of 1-year bond rates, adjusted to ensure that the long bond rates match observed long bond rates in the first projection year.

They are calculated outside of the model to allow their calculation to fully reflect the non-linearities in the compounding relationship between them and the 1-year bond rates. This is why they are included in the SYM model definition as exogenous variables while, in fact, they are endogenous.