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RBA Glossary definition for Nominal interest rate

Nominal interest rate – The nominal interest rate refers to the cost of borrowing money before adjustment for inflation i.e. it includes compensation for the expected erosion of the value of the borrowed funds due to inflation. It is the cost visible to the borrower, and is composed of the real interest rate plus inflation.

RBA Glossary definition for interest rate

interest rate – The term used to describe the cost of borrowing money or the return to the owner of the funds which are invested or lent out. It is usually expressed as a percent per annum of the amount of money borrowed, lent or invested.

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Financial Indicators and Nominal Private Demand: Graphical Comparisons

1 Aug 1988 RDP 8805
Michele Bullock, Dirk Morris and Glenn Stevens
It is clear that nominal interest rates did not perform well as an indicator of nominal demand in this period. ... Up to 1971, the general upward trend in growth of nominal demand was matched by a rise in nominal interest rates.
https://www.rba.gov.au/publications/rdp/1988/8805/financial-indicators-and-nominal-private-demand-graphical-comparisons.html

Conclusions

1 Aug 1988 RDP 8805
Michele Bullock, Dirk Morris and Glenn Stevens
Nominal interest rates have been less useful as an indicator of growth in nominal private demand during periods of high and variable inflation, such as in the early and mid 1970s. ... Since 1983, the relationship of nominal interest rates to nominal
https://www.rba.gov.au/publications/rdp/1988/8805/conclusions.html

Appendix: Data Sources and Methods

1 Aug 1988 RDP 8805
Michele Bullock, Dirk Morris and Glenn Stevens
Bulletin. ; historical series are available on the Bulletin Database. The monthly data are averaged for each quarter, to form a better representation of the average interest rate prevailing in the quarter. ... Data for real interest rates are calculated
https://www.rba.gov.au/publications/rdp/1988/8805/appendix.html

The Relationship between Financial Indicators and Economic Activity: 1968-1987

1 Aug 1988 RDP 8805
Michele Bullock, Dirk Morris and Glenn Stevens
Research Discussion Papers contain the results of economic research within the Reserve Bank
https://www.rba.gov.au/publications/rdp/1988/8805.html

The Indicators

1 Aug 1988 RDP 8805
Michele Bullock, Dirk Morris and Glenn Stevens
The other issue of importance is whether to use a nominal or a real interest rate. ... It is defined as the nominal interest rate less the four-quarter ended change in the consumer price index for the same quarter.
https://www.rba.gov.au/publications/rdp/1988/8805/indicators.html

Introduction

1 Aug 1988 RDP 8805
Michele Bullock, Dirk Morris and Glenn Stevens
The financial indicators include interest rates and a range of financial aggregates; the measures of activity are confined to changes in real and nominal private final expenditure. ... the movements in financial variables (interest rates and financial
https://www.rba.gov.au/publications/rdp/1988/8805/introduction.html

Financial Indicators and Real Private Demand: Graphical Comparisons

1 Aug 1988 RDP 8805
Michele Bullock, Dirk Morris and Glenn Stevens
FIGURE 4: INTEREST RATES AND REAL PRIVATE DEMAND. (DEMAND SMOOTHED). Despite this, there is a clear inverse relationship between nominal interest rates and changes in real private demand. ... FIGURE 6: M1 AND INTEREST RATES. (INTEREST RATES ON A NEGATIVE
https://www.rba.gov.au/publications/rdp/1988/8805/financial-indicators-and-real-private-demand-graphical-comparisons.html

Financial Indicators and Real Private Demand: Correlation Analysis

1 Aug 1988 RDP 8805
Michele Bullock, Dirk Morris and Glenn Stevens
Overall, the relationship is not as strong as that between interest rates and demand. ... In summary, the evidence to this point suggests that nominal interest rates and M1 have had a consistent, leading relationship with real private demand over the
https://www.rba.gov.au/publications/rdp/1988/8805/financial-indicators-and-real-private-demand-correlation-analysis.html

Financial Indicators and Nominal Private Demand: Correlation Analysis

1 Aug 1988 RDP 8805
Michele Bullock, Dirk Morris and Glenn Stevens
For interest rates, all significant coefficients are negative, as expected. In other words, a rise in the short-term interest rate is generally associated with a fall in nominal demand, a ... Footnotes. The negative leading relationship between interest
https://www.rba.gov.au/publications/rdp/1988/8805/financial-indicators-and-nominal-private-demand-correlation-analysis.html