The longer the expected period of reinvestment, the stronger the downward pressure on yields.
It has become fashionable to berate economists. For instance, Philip Stephens, the associate editor of the Financial Times, recently wrote that “The economy is too important to be left to economists”. In my view, the accusations levelled against economists are, at best, only partly justified, however. Allow me to use the events at L’Aquila again by way of illustration.