Sims (2002), reviewing this evidence and confirming the finding, attributes a good deal of the performance improvement to the effort to get a more accurate estimate of the current state of the economy, so reducing the errors in the very early period of the forecast.
These declines in CGS yields over recent years – and similar declines in yields on state government bonds (“semis”) – have occurred notwithstanding an increase in the supply of CGS and semis on issue. But the stock of debt on issue remains considerably less as a share of GDP than nearly all other jurisdictions (Graph 5).