The yield curve and planned NDGP

The first should predict the second snce the banker yield curve represents the expected gain in inventory growth over the period of the loan.  So when we are steep, say from 2-10, we know people are planning growth in ten year inventory, big stuff like plant and equipment with long depreciation cycles.

Also, related, is hydraulic mode i which we treat the yield curve as a spectrum, but in QM term, compactly represented to a fixed SNR.  But if we strip away the entropy encoding and look at the equilibrium curve underneath, we find it is peaked about the ten year frequency (1/10 cycles per year)  In the production spectrum the bell shape at equilibrium centers about  1/10 on the positive frequency axis (transaction rate).

Putting these two together we can do a bit of forensic sleuthing and deduce that we are telling the banks about ten year projects that solve our economic problems.  What? Likely mergers and acquisitions that shorten the supply  chain and gain from economies of scale.

What do bankers think  these projects generate in terms of GDP growth?  Well a little bit of frequency transform into the time domain gives us a planned peak in the next business cycle at ten years.

Notice that the curve gets flatter at the end of business cycles?  As the cycle gets near the peak, marginal returns drop, especially at the consumer end.  As the cycle ages it is increasingly difficult to find product opportunities, especially true if the  cycle was well planned.  The curve get flatter because bankers want greater inventory growth to cover the extra search costs.  Converting a flat curve back to the time domain, the flat curve predicts an impossible spike in GDP growth, so we deflate and retool.

In this growth model since say the 1970s, the sequence has been use existing means of production until marginal costs are too high; then switch over to the surplus new technology and readjust the production spectrum.  During each cycle surplus technology builds up for the next phase, we will almost never have a shortage of technology.