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RBA Glossary definition for basis point

basis point – A basis point is 1/100th of 1 per cent or 0.01 per cent, so 100 basis points (bps) is equal to 1 percentage point. The term is used in money and securities markets to define differences in interest or yield. If an interest rate were to increase from 2 per cent to 3 per cent, it is said to have risen by 100 basis points (bps) or one percentage point.

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The Effects of a 100 Basis Point Monetary Policy Shock

3 Jan 2023 RDP 2022-09
Matthew Read
Table 3: Posterior Lower Probability that Response to 100 Basis Point Shock is Less than Threshold. ... reasonably robust evidence for an appreciable fall in prices following a 100 basis point shock.
https://www.rba.gov.au/publications/rdp/2022/2022-09/the-effects-of-a-100-basis-point-monetary-policy-shock.html

Estimating the Effects of Monetary Policy in Australia Using Sign-restricted Structural Vector Autoregressions

3 Jan 2023 RDP 2022-09
Matthew Read
The results are consistent with the macroeconomic effects of a 100 basis point increase in the cash rate lying towards the upper end of the range of existing estimates.
https://www.rba.gov.au/publications/rdp/2022/2022-09.html

Estimating the Effects of Monetary Policy in Australia Using Sign-restricted Structural Vector Autoregressions

3 Jan 2023 RDP 2022-09
Matthew Read
100 basis points; the effects of a standard deviation shock do not provide this information. ... Sign restrictions may therefore be extremely uninformative about the effects of a 100 basis point shock.
https://www.rba.gov.au/publications/rdp/2022/2022-09/full.html

Introduction

3 Jan 2023 RDP 2022-09
Matthew Read
100 basis points; the effects of a standard deviation shock do not provide this information. ... Sign restrictions may therefore be extremely uninformative about the effects of a 100 basis point shock.
https://www.rba.gov.au/publications/rdp/2022/2022-09/introduction.html

Appendix A: Algorithms for Inference

3 Jan 2023 RDP 2022-09
Matthew Read
In practice, one can compute the vector satisfying the active sign restrictions by computing an orthonormal basis for the null space of. ... When interest is in the impulse responses to a 100 basis point monetary policy shock (Section 4), I check whether.
https://www.rba.gov.au/publications/rdp/2022/2022-09/appendix-a.html

Conclusion

3 Jan 2023 RDP 2022-09
Matthew Read
Nevertheless, it remains possible to draw some useful inferences about the effects of a 100 basis point shock. ... For example, in response to a 100 basis point shock, there is strong evidence that output declines by at least half a per cent at the
https://www.rba.gov.au/publications/rdp/2022/2022-09/conclusion.html

Robustness Exercises

3 Jan 2023 RDP 2022-09
Matthew Read
In response to a 100 basis point shock, the posterior lower probability that the response of the unemployment rate exceeds 0.25 percentage points is around 50 per cent and the ... lower probability that it exceeds 0.5 percentage points is less than 20
https://www.rba.gov.au/publications/rdp/2022/2022-09/robustness-exercises.html

Estimating the Effects of Monetary Policy in Australia Using Sign-restricted Structural Vector Autoregressions

3 Jan 2023 RDP 2022-09
Matthew Read
Research Discussion Paper – RDP 2022-09 Estimating the Effects of Monetary Policy in Australia Using Sign-restricted Structural Vector Autoregressions. Matthew Read. December 2022. 1.84. MB. I thank Alexander Ballantyne, Benjamin Beckers, Anthony
https://www.rba.gov.au/publications/rdp/2022/2022-09/sections.html

Non-technical summary for ‘The Rise in Household Liquidity’

3 Jan 2023 RDP 2022-09
Matthew Read
The results are consistent with the macroeconomic effects of a 100 basis point increase in the cash rate lying towards the upper end of the range of existing estimates.
https://www.rba.gov.au/publications/rdp/2022/2022-09/non-technical-summary.html

Estimates under Different Sets of Sign Restrictions

3 Jan 2023 RDP 2022-09
Matthew Read
When using the standard Bayesian approach to inference, and based on the posterior mean, the shock results in the cash rate increasing by about 20 basis points on impact. ... If the restrictions were point identifying, the informativeness measure would
https://www.rba.gov.au/publications/rdp/2022/2022-09/estimates-under-different-sets-of-sign-restrictions.html