1. Questions

2. 1. What factors were behind the convergence of euro zone long rates that occurred from the late 1990s up until the beginning of the gfc?

3. 2. What factors were behind the divergence of euro zone long rates that began during the global financial crisis and persist today?

4. 3. Do you think the level of German long- term rates will increase or decrease over the next year? Why?

5. 4. Do you think spreads in long-term rates between Greece and Germany will widen or tighten over the next year? Why?

6. Expected future output Wealth Government budget deficit Monetary Policy, Inflation Safe Haven, Risk on /Risk Off Expected returns in other assets Factors