A parent may receive employment income today, but tuition fees for his or her ward may not have to be paid until next year. Because considerable time can elapse between expenditure being incurred and the receipt of income, various institutions, including commercial banks, have emerged to assist in the  BIS Review 81/2010  1  financing of business during this interval.
It can also be downward sloping, or inverted, if the short-term interest rates exceed the rates on bonds with long-dated maturities. To begin our discussion of the yield curve, it is worth revisiting the Fisher equation, named after American economist Irving Fisher.