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10 Nov 2021
RDP
2021-10
Gianni La Cava and Lydia Wang
The relevant interest rate is derived from RBA statistical table ‘F5 Indicator Lending Rates’. ... Households may respond to this increased risk by increasing their rate of precautionary saving.
https://www.rba.gov.au/publications/rdp/2021/2021-10/full.html
10 Nov 2021
RDP
2021-10
Gianni La Cava and Lydia Wang
0. where first period consumption ( c. 1. ) must be no greater than ‘cash on hand’ ( x. ... If the borrowing constraint is binding, then the optimal level of cash on hand is:.
https://www.rba.gov.au/publications/rdp/2021/2021-10/appendix-d.html
10 Nov 2021
RDP
2021-10
Gianni La Cava and Lydia Wang
We document a less well-known phenomenon: household liquid assets (such as cash, deposits and equities) have also risen strongly relative to income over the same period. ... schedule. The process of building wealth and liquidity through debt amortisation
https://www.rba.gov.au/publications/rdp/2021/2021-10.html
10 Nov 2021
RDP
2021-10
Gianni La Cava and Lydia Wang
Functions: Produces regression results for Table 3: The Effect of Interest Rates on Household-level Liquidity. ... Do file: Set up – Cash rate.do. Functions: This program converts RBA statistical table F5 from excel format to dta format for later use.
https://www.rba.gov.au/publications/rdp/2021/2021-10/read-me.html
10 Nov 2021
RDP
2021-10
Gianni La Cava and Lydia Wang
Baumol WJ (1952), ‘The Transactions Demand for Cash: An Inventory Theoretic Approach’, The Quarterly Journal of Economics, 66(4), pp 545–556. ... Black S, D Titkov and L Wang (2020), ‘Developments in Banks' Funding Costs and Lending Rates’, RBA
https://www.rba.gov.au/publications/rdp/2021/2021-10/references.html
10 Nov 2021
RDP
2021-10
Gianni La Cava and Lydia Wang
Based on an unexpected 100 basis point decrease in the cash rate, aggregate level. ... Figure 18: Response of Mortgage Payments to Monetary Policy Shock. Based on unexpected 100 basis point decrease in the cash rate, aggregate level.
https://www.rba.gov.au/publications/rdp/2021/2021-10/the-rise-in-household-liquidity-and-falling-interest-rates.html
10 Nov 2021
RDP
2021-10
Gianni La Cava and Lydia Wang
Download the Paper 1.71. MB. Households need liquid assets, such as cash, to get through periods of financial stress (Ganong and Noel 2018). ... Principal payments on mortgage debt, including prepayments, explain almost all of the trend in the household
https://www.rba.gov.au/publications/rdp/2021/2021-10/the-rise-in-household-liquidity.html
10 Nov 2021
RDP
2021-10
Gianni La Cava and Lydia Wang
The relevant interest rate is derived from RBA statistical table ‘F5 Indicator Lending Rates’. ... The scheduled payment can then be split into the interest component by multiplying the interest rate by the outstanding loan balance and the principal
https://www.rba.gov.au/publications/rdp/2021/2021-10/how-do-we-measure-household-liquidity.html
10 Nov 2021
RDP
2021-10
Gianni La Cava and Lydia Wang
This channel predicts a positive correlation at the household level between the growth rate of debt and liquid assets at the time of equity extraction or refinancing. ... Households may respond to this increased risk by increasing their rate of
https://www.rba.gov.au/publications/rdp/2021/2021-10/household-liquidity-and-mortgage-debt-dynamics.html
10 Nov 2021
RDP
2021-10
Gianni La Cava and Lydia Wang
An obvious demand-side explanation for the rise in household cash is an ageing population. ... This is consistent with banks competing harder for deposits by offering more attractive transaction and saving accounts, particularly through paying higher
https://www.rba.gov.au/publications/rdp/2021/2021-10/alternative-explanations-for-the-rise-in-household-liquidity.html