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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 C: The Effect of Different Interest Rate Assumptions

1 Feb 1998 RDP 9803
Gordon de Brouwer and Luci Ellis
Download the Paper 344. KB. This appendix sets out an example to show the effect on the variability of interest rates of different interest rate assumptions in forward-looking monetary policy ... If policy-makers are assumed to keep real, rather than
https://www.rba.gov.au/publications/rdp/1998/1998-03/appendix-c.html

Appendix B: A Framework for Analysis

1 Feb 1998 RDP 9803
Gordon de Brouwer and Luci Ellis
Price. Terms of trade. Real exchange rate. World export prices. World real interest rate. ... is the real interest rate less the risk premium, and r is the real interest rate.
https://www.rba.gov.au/publications/rdp/1998/1998-03/appendix-b.html

Policy Implications

1 Feb 1998 RDP 9803
Gordon de Brouwer and Luci Ellis
interest rates that affect output and the real exchange rate will be different from each other. ... Since the exchange rate depends on current and future real interest rates, it jumps up in response to tighter expected monetary policy.
https://www.rba.gov.au/publications/rdp/1998/1998-03/policy-implications.html

Forward-looking Behaviour and Credibility: Some Evidence and Implications for Policy

1 Aug 1998 RDP 9803
Gordon de Brouwer and Luci Ellis
Research Discussion Papers contain the results of economic research within the Reserve Bank
https://www.rba.gov.au/publications/rdp/1998/9803.html

Conclusions

1 Feb 1998 RDP 9803
Gordon de Brouwer and Luci Ellis
We have three main conclusions. First, inflation and output are substantially less variable when policy-makers are forward looking, setting interest rates using model-consistent expectations of inflation and the output ... gap. For the particular model
https://www.rba.gov.au/publications/rdp/1998/1998-03/conclusions.html

Introduction

1 Feb 1998 RDP 9803
Gordon de Brouwer and Luci Ellis
If inflation is higher than expected, financial markets will expect higher future real interest rates and an appreciation of the exchange rate (all else given) if they believe that the central ... Moreover, when groups of people in the economy form their
https://www.rba.gov.au/publications/rdp/1998/1998-03/introduction.html

References

1 Feb 1998 RDP 9803
Gordon de Brouwer and Luci Ellis
74–112. Kim, S.-J. (1994), ‘Inflation News in Australia: Its Effect on Exchange Rates and Interest Rates’, University of Sydney Working Paper in Economics No. ... 210. Lowe, P. and L. Ellis (1997), ‘The Smoothing of Official Interest Rates’, in
https://www.rba.gov.au/publications/rdp/1998/1998-03/references.html

Forward-Looking Behaviour and Credibility: Some Evidence and Implications for Policy

1 Feb 1998 RDP 9803
Gordon de Brouwer and Luci Ellis
Research Discussion Paper – RDP 9803 Forward-Looking Behaviour and Credibility: Some Evidence and Implications for Policy. Gordon de Brouwer and Luci Ellis. February 1998. 344. KB. This paper was prepared for the Model Builders' and Econometricians
https://www.rba.gov.au/publications/rdp/1998/1998-03/

Evidence on the Formation of Inflation Expectations

1 Feb 1998 RDP 9803
Gordon de Brouwer and Luci Ellis
In a rational market, foreign exchange market participants anticipate the higher real interest rates, and the exchange rate may appreciate in response to the positive inflation surprise. ... The exchange rate now systematically moves in the same
https://www.rba.gov.au/publications/rdp/1998/1998-03/evidence-on-the-formation-of-inflation-expectations.html