Ok, elsewhere I sought guidance to understand Hayek's Triangle and the distribution of capital. But this structure of capital is distended and warped by centrally planned interest rate manipulation. In these discussions of how interest rates warp the structure of capital, we only seem to acknowledge one "interest rate" that is the driver.

In real life, we have a whole term structure of interest rates - a 3 month rate , 1 year, 5 year, 30 year rates, and everything in between. How do we account for the terms tructure of interest rates in the influence of the structure of capital?

Thanks

"...a fellow of infinite jest, of most excellent fancy..."

Under today's fiat-money regimes, central banks, as a rule, control short-term interest rates. They do so by setting the interest rates on short-term loans extended to commercial banks (typically with maturities of one day, one week, two weeks, or one month).

By determining short-term interest rates, a central bank exerts a strong influence on longer-term interest rates (such as, for instance, 10-year bond yields). The expectation theory of the term structure of interest rates explains why this is the case.[1]