Search: Real interest rate
RBA Glossary definition for Real interest rate
Real interest rate – The real interest rate refers to the cost of borrowing money (i.e. the nominal interest rate) net of inflation. It takes account of the fact that part of the nominal interest that borrowers pay to lenders represents compensation for anticipated inflation. The remaining �real� component better reflects the economic cost of borrowing and the return to lending.
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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Appendix A: Estimates of the Model
1 Sep 2000
RDP
2000-06
Interest rates are expressed in per cent per annum divided by 100, and all other variables are expressed in logs. ... output. The six lags of the real interest rate are jointly significant (χ.
https://www.rba.gov.au/publications/rdp/2000/2000-06/appendix-a.html
Appendix B: Equations for the Exogenous Variables in the Model
1 Sep 2000
RDP
2000-06
wr. = 0.0012 and α. wp. = 0.0019). These calibrated coefficients also ensure that the exogenous variables, except the world real interest rate, are equal to 100 in the initial period. ... The equilibrium world real interest rate is set equal to its
https://www.rba.gov.au/publications/rdp/2000/2000-06/appendix-b.html
The Model
1 Sep 2000
RDP
2000-06
There are also two identities; for the real interest rate and the nominal exchange rate. ... real interest rates, real foreign output – proxied by US GDP – the real trade-weighted exchange rate and the terms of trade.
https://www.rba.gov.au/publications/rdp/2000/2000-06/model.html
Open Economy Inflation Targeting
1 Sep 2000
RDP
2000-06
This exchange rate effect works in conjunction with the aggregate demand channel of monetary policy whereby a decrease in interest rates stimulates aggregate demand and increases inflation. ... and the output gap (y y. p. ). When both of these feedback
https://www.rba.gov.au/publications/rdp/2000/2000-06/open-economy-inflation-targeting.html
Appendix D: Data Definitions and Sources
1 Sep 2000
RDP
2000-06
Source:. Reserve Bank of Australia Bulletin, Table F.11. wr. Foreign real short-term interest rate. ... Source:. Nominal policy interest rates for the US, Japan and the UK – Reserve Bank of Australia Bulletin, Table F.11 Datastream, BDSU0110 for the
https://www.rba.gov.au/publications/rdp/2000/2000-06/appendix-d.html
Empirical Results of Stochastic Simulations
1 Sep 2000
RDP
2000-06
A second issue concerns our empirical finding that interest rates affect the exchange rate with a one period lag. ... This is still a bit high but in a representative simulation (with an inflation target of 2 and neutral real interest rate of 3) the
https://www.rba.gov.au/publications/rdp/2000/2000-06/empirical-results-of-stochastic-simulations.html