The Term Structure of Interest Rates: Expectations and Behavior Patterns.

MALKIEL, Burton Gordon. [Paul A. Samuelson].

Item Number: 135994

Princeton, New Jersey: Princeton University Press, 1966.

First edition of Malkiel’s classic study of the term structure of interest rates. Octavo, original cloth. Association copy, inscribed by the author on the front free endpaper, “For Paul With my best wishes Burt Malkiel.” The recipient, American economist Paul Samuelson is widely considered the “Father of Modern Economics” and the most influential economist of the later half of the 20th century. In 1970, he became the first American to win the Nobel Memorial Prize in Economic Sciences for “[doing] more than any other contemporary economist to raise the level of scientific analysis in economic theory.” Samuelson considered mathematics to be the “natural language” for economists and contributed significantly to the mathematical foundations of economics with his book Foundations of Economic Analysis. In 1948, he published Economics: An Introductory Analysis, which remains one of the bestselling economics textbooks of all time. Samuelson worked in many theoretical fields, including: consumer theory; welfare economics; capital; and finance, particularly the efficient-market hypothesis which Malkiel became a leading proponent of. The theory, which contends that prices of publicly traded assets reflect all publicly available information, emerged in the mid 1960s when Samuelson published a proof showing that if the market  was efficient, prices would exhibit random-walk behavior, or the financial theory stating that stock market prices evolve according to a random walk (so price changes are random) and thus cannot be predicted. The random walk theory, in turn, was popularized in 1973 with the publication of Malkiel’s A Random Walk Down Wall Street which, as of 2020, has sold over 1.5 million copies. Near fine in a near fine dust jacket. From the library of Paul Samuelson. A very nice association copy linking two of the leading proponents of the efficient-market hypothesis.

Can expectations alone explain the yield differentials among bonds of different maturities? To what extent do attitudes toward risk and transactions costs influence the behavior of bonds investors? Is it possible for the Federal Reserve deliberately to "twist" the interest-rate structure in accordance with its policy objectives? These and other questions are treated in Burton Malkiel's theoretical and empirical study, The Term Structure of Interest Rates, an early predecessor to his highly popular A Random Walk Down Wall Street.