The boundary of the sensible present thus occurs as a relative or intermediate horizon, the meaning of which depends on whether we approach the horizon from within or from without.
As demonstrated above, durations immediately accessible to perceptual experience are delimited by the absolute inner and outer horizons; the phenomenon of sensible present imposes another, intermediate horizon, thus narrowing limit the region of actually perceivable durations (Figure 4).
They also find that this variable is a better forecaster of future returns at short and intermediate horizons
than is the dividend yield, the earnings yield, the dividend payout ratio, and several other popular forecasting variables.
Recent studies have explored the ability of spreads between long and short yields to forecast subsequent movements in interest rates, and have found that spreads do forecast interest rate movements over short horizons up to about three months, and over long horizons beyond about two years, but do not forecast interest rate movements at intermediate horizons
. This pattern is sometimes called a "predictability smile," because a graph of interest rate predictability has the shape of a smile.