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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 Federal Funds Rate Shock

11 Oct 2022 RDP 2022-04
Matthew Read
to a 100 basis point shock are guaranteed to be bounded with very high posterior probability. ... Table 1: Posterior Lower and Upper Probabilities that Decline in Output Exceeds Threshold Following 100 Basis Point Shock.
https://www.rba.gov.au/publications/rdp/2022/2022-04/the-effects-of-a-100-basis-point-federal-funds-rate-shock.html

The Unit-effect Normalisation in Set-identified Structural Vector Autoregressions

11 Oct 2022 RDP 2022-04
Matthew Read
I illustrate the empirical relevance of these issues by estimating the response of US output to a 100 basis point federal funds rate shock under different sets of identifying restrictions. ... Some restrictions are very uninformative about the effects of
https://www.rba.gov.au/publications/rdp/2022/2022-04.html

The Unit-effect Normalisation in Set-identified Structural Vector Autoregressions

11 Oct 2022 RDP 2022-04
Matthew Read
This indicates that identified sets for the impulse responses to a 100 basis point shock may always be unbounded. ... These restrictions are therefore extremely uninformative about the effects of a 100 basis point shock.
https://www.rba.gov.au/publications/rdp/2022/2022-04/full.html

Conclusion

11 Oct 2022 RDP 2022-04
Matthew Read
output effects of a 100 basis point monetary policy shock and posterior inferences remain sensitive to the choice of prior. ... The latter two sets of restrictions effectively rule out large declines in output following a 100 basis point shock.
https://www.rba.gov.au/publications/rdp/2022/2022-04/conclusion.html

Appendix D: Additional Empirical Results

11 Oct 2022 RDP 2022-04
Matthew Read
Figure D1: Output Responses to 100 Basis Point Shock – Alternative Horizons.
https://www.rba.gov.au/publications/rdp/2022/2022-04/appendix-d.html

Introduction

11 Oct 2022 RDP 2022-04
Matthew Read
This indicates that identified sets for the impulse responses to a 100 basis point shock may always be unbounded. ... These restrictions are therefore extremely uninformative about the effects of a 100 basis point shock.
https://www.rba.gov.au/publications/rdp/2022/2022-04/introduction.html

The Unit-effect Normalisation in Set-identified Structural Vector Autoregressions

11 Oct 2022 RDP 2022-04
Matthew Read
Research Discussion Paper – RDP 2022-04 The Unit-effect Normalisation in Set-identified Structural Vector Autoregressions. Matthew Read. October 2022. 2,225. KB. I thank Christiane Baumeister, Benjamin Beckers, Anthony Brassil, Thomas Cusbert,
https://www.rba.gov.au/publications/rdp/2022/2022-04/sections.html

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

11 Oct 2022 RDP 2022-04
Matthew Read
I illustrate these issues by estimating the response of US output to a monetary policy shock that raises the federal funds rate by 100 basis points on impact. ... Those restrictions are consequently extremely uninformative about the output effects of a
https://www.rba.gov.au/publications/rdp/2022/2022-04/non-technical-summary.html

Framework

11 Oct 2022 RDP 2022-04
Matthew Read
τ. -quantiles’ as an interval with end points equal to the. ... While the standard Bayesian approach to inference assumes a uniform prior for Q on the basis that this is ‘uninformative’, Baumeister and Hamilton (2015) show that the implicit prior
https://www.rba.gov.au/publications/rdp/2022/2022-04/framework.html

Checking for Unboundedness in SVARs

11 Oct 2022 RDP 2022-04
Matthew Read
1. ,. 0. does not contain zero, it is not possible to construct a sequence for Q converging to the point where. ... The assumption that. 0. f. <. n. 1. rules out point identification of q.
https://www.rba.gov.au/publications/rdp/2022/2022-04/checking-for-unboundedness-in-svars.html