Moreover, the necessity of taking into account monetary policy in the rational expectations framework has been demonstrated in particular by the seminal work of Mankiw and Miron (1986) for the short end of the term structure. For the long part of the term structure, Fuhrer (1996), without specifying any process for the perception of regime shifts by agents, has shown that the expectations hypothesis can be accepted for the long part of the yield curve if we allow some small and discrete changes in the coe¢ cients of the reaction function for the Federal Reserve System. These results conÖrm the relevance of monetary policy for the . term.
