1 Philip R. Lane (2011), “Innovation and Financial Globalisation,” in Lessons from East Asia and the Global  Financial Crisis: Annual World Bank Conference on Development Economics Global (Justin Yifu Lin and Boris Pleskovic, editors), 309-332. 2 Philip R. Lane and Gian Maria Milesi-Ferretti (2016), “International Financial Integrationin the Aftermath of the  Global Financial Crisis”, presentation, IMF Annual Research Conference.
However, looking at the facts, we find that the yield curve often tends to flatten when monetary policy is tightened. Chart 3 shows the uncollateralized overnight call rate and long-term interest rates -- represented by 10-year Japanese government bond yields -- from 2000 to the present.