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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.

Search Results

Affine Endeavour: Estimating a Joint Model of the Nominal and Real Term Structures of Interest Rates in Australia

27 Feb 2018 RDP 2018-02
Jonathan Hambur and Richard Finlay
financial markets, inflation, interest rates, modelling, money. We outline a ‘workhorse’ affine term structure model of nominal and real interest rates in Australia. ... Nevertheless, they suggest that medium- to long-term expectations for real
https://www.rba.gov.au/publications/rdp/2018/2018-02.html

The Model

27 Feb 2018 RDP 2018-02
Jonathan Hambur and Richard Finlay
It is a joint model of the nominal and real term structures of interest rates. ... Considering first an ATSM of nominal interest rates, we assume that the one-period nominal interest rate (r.
https://www.rba.gov.au/publications/rdp/2018/2018-02/the-model.html

Affine Endeavour: Estimating a Joint Model of the Nominal and Real Term Structures of Interest Rates in Australia

1 Feb 2018 RDP 2018-02
Jonathan Hambur and Richard Finlay
Expectations for real interest rates, particularly a long way into the future, provide information about the economy's expected potential growth rate and the neutral real interest rate: the real rate ... As these reflect expectations of real short-term
https://www.rba.gov.au/publications/rdp/2018/2018-02/full.html

Conclusion

27 Feb 2018 RDP 2018-02
Jonathan Hambur and Richard Finlay
RDP 2018-02: Affine Endeavour: Estimating a Joint Model of the Nominal and Real Term Structures of Interest Rates in Australia 6. ... The model suggests that expected real rates a number of years in the future, a market-based measure of the neutral real
https://www.rba.gov.au/publications/rdp/2018/2018-02/conclusion.html

Appendix E: Estimated Forward Rates for Reduced Sample

27 Feb 2018 RDP 2018-02
Jonathan Hambur and Richard Finlay
RDP 2018-02: Affine Endeavour: Estimating a Joint Model of the Nominal and Real Term Structures of Interest Rates in Australia Appendix E: Estimated Forward Rates for Reduced Sample. ... x-year-ahead. Figure E2: Expected Future Real Interest Rates. x-year
https://www.rba.gov.au/publications/rdp/2018/2018-02/appendix-e.html

Appendix F: Estimated Forward Rates for the Unfiltered Model

27 Feb 2018 RDP 2018-02
Jonathan Hambur and Richard Finlay
RDP 2018-02: Affine Endeavour: Estimating a Joint Model of the Nominal and Real Term Structures of Interest Rates in Australia Appendix F: Estimated Forward Rates for the Unfiltered Model. ... x-year-ahead. Figure F2: Expected Future Real Interest Rates.
https://www.rba.gov.au/publications/rdp/2018/2018-02/appendix-f.html

Introduction

27 Feb 2018 RDP 2018-02
Jonathan Hambur and Richard Finlay
Expectations for real interest rates, particularly a long way into the future, provide information about the economy's expected potential growth rate and the neutral real interest rate: the real rate ... The results suggest that medium- to long-term
https://www.rba.gov.au/publications/rdp/2018/2018-02/introduction.html

Results

27 Feb 2018 RDP 2018-02
Jonathan Hambur and Richard Finlay
The implied steady-state rates of one-period inflation, nominal and real interest rates are all near their sample averages, at around 2.7 per cent, 4 per cent and 2 ... As these reflect expectations of real short-term interest rates in the relatively
https://www.rba.gov.au/publications/rdp/2018/2018-02/results.html

Affine Endeavour: Estimating a Joint Model of the Nominal and Real Term Structures of Interest Rates in Australia

1 Feb 2018 RDP 2018-02
Jonathan Hambur and Richard Finlay
Research Discussion Paper – RDP 2018-02 Affine Endeavour: Estimating a Joint Model of the Nominal and Real Term Structures of Interest Rates in Australia.
https://www.rba.gov.au/publications/rdp/2018/2018-02/sections.html

Appendix C: Estimating the Real Zero-coupon Yield Curve

27 Feb 2018 RDP 2018-02
Jonathan Hambur and Richard Finlay
RDP 2018-02: Affine Endeavour: Estimating a Joint Model of the Nominal and Real Term Structures of Interest Rates in Australia Appendix C: Estimating the Real Zero-coupon Yield Curve. ... We then calculate what forward rate is required to price the next
https://www.rba.gov.au/publications/rdp/2018/2018-02/appendix-c.html