Lately we have been seeing the first signs of a change in labour behaviour and, although, over the next couple of years wage growth will probably continue to be about 2% in most developed economies, this cannot be taken for granted over the medium to longer run.
To the extent that participants anticipate policy actions, the yield curve evolves in a forward-looking manner and this is conducive for monetary policy transmission. Research in the Reserve Bank in the Indian context suggests that macroeconomic developments have a significant role in determining the shape of the yield curve.